Strong manufacturing and export data helped Indian markets to surge
Indian markets began the week on a strong note, following a surge in manufacturing activity in the month of February and rise in exports for the third consecutive month in January. The market gained momentum after a surge in Tata Motors on reports that the company had reported strong vehicle sales in February. At the end of the day, the Sensex shot up 343 points from Friday’s close to 16,773, while the Nifty closed at 5,017, up 95 points. Tomorrow we expect the market to stay up.
At the end of the day, Reliance Industries Limited (RIL) rose 1% on reports of a possible acquisition of Canada’s Value Creation.
Tata Motors rose 12% after the company reported that its total vehicle sales rose 58.46% to 69,427 units in February 2010 over February 2009.
Welspun Gujarat Stahl Rohren gained 3%, after the company bagged overseas orders aggregating Rs600 crore for supplying pipes and plates.
Shree Ashtavinayak Cine Vision declined 5%, after Dhilin H Mehta, chairman & managing director and also a promoter of the company, pledged additional 3.80 crore shares representing 4.81% stake of the firm.
Everest Kanto Cylinder gained 3%, after the company won three orders aggregating $27 million to export CNG cylinders.
EdServ Softsystems rose 5% after the company acquired Chennai-based e-learning firm, SmartLearn WebTV.
Glenmark Generics Inc, a subsidiary of Glenmark Generics, has received ANDA approval from the United States Food and Drug Administration for Ropinirole Hydrochloride and will immediately commence marketing and distribution of the approved product. Glenmark Pharmaceuticals gained 2%.
Reliance Media World’s radio division Big 92.7 FM has entered into a partnership with OnMobile Global, to launch a radio experience on the mobile platform. The stock shot up 4%.
As per reports, prime minister Manmohan Singh on Monday ruled out rolling back a price hike in retail fuel prices despite pressure from his main allies, saying that populist policies would hurt the economy in the long term. He also tried to calm the fears of fuel price hike stoking inflation by saying that the direct effect on the Wholesale Price Index (WPI) will be no more than 0.4%.
During trading hours, global ratings agency Moody’s Investor's Service said that the latest Budget represents a strong intention to renew fiscal discipline, which coupled with a fuel price increase announced last week are positive for its sovereign rating on India. Moody’s rates India’s local currency sovereign rating as ‘Ba2’ and assigned a positive outlook in December 2009.
The manufacturing industry in February 2010 grew at its fastest pace in 20 months, expanding for the third month, thanks to expanding output and new orders, a survey showed. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, rose to 58.5 in February, its strongest reading since June 2008, from 57.7 in January. A reading above 50 means activity is expanding.
Exports rose an annual 11.5% in January 2010 to $14.3 billion, the third consecutive rise after 13 straight months of decline, the government said. Imports rose 35.5% from a year earlier to $24.7 billion. The trade deficit stood at $10.4 billion in January compared with $5.4 billion a year earlier. Exports for April-January, the first 10 months of the 2009-10 fiscal year, were down 17.8% at $131.9 billion from the same period in the previous year.
During the day, Asia’s key benchmark indices in Indonesia, South Korea, Singapore, Japan and Taiwan rose between 0.2%-1.29%. However, indices in China and Hong Kong fell between 0.48%-0.72%. According to reports, the Purchasing Managers’ Index (PMI) derived from a survey conducted by the China Federation of Logistics and Purchasing for the National Bureau of Statistics (NBS) fell to 52 in February from 55.8 in January.
As per media reports, the Australian central bank raised its cash rate another quarter of a percentage point to 4%.
On Monday, 1 March 2010, the Dow Jones Industrial Average gained 79 points while the S&P 500 and the Nasdaq Composite were up 11 points and 35 points respectively.
The ISM reported that the manufacturing sector continued to grow in February 2010, even though it fell to 56.5 from 58.4 in January, as the gauge remained over 50. On the consumer front, personal spending rose 0.5% in January, even though income gained only 0.1%. Spending on both durable and non-durable goods was strong.
According to the US commerce department, the fourth-quarter gross domestic product of the US grew at a 5.9% annual rate, rather than the 5.7% pace it estimated last month.
In premarket trading, the Dow was trading 44 points higher.