Local bourses in upbeat mood; Sensex reclaims 18k mark

The local bourses are still riding high on the success of the Union Budget 2011-2012 since the budget presented few negatives, than a surfeit of positives, thereby giving some relief to the ailing equity markets. The local bourses showcased more poise after the Finance Minister's projection that the economy will grow by nearly 9 per cent in the next fiscal. Investors embarked on a buying spree, cheered up by the projections and proposal in the 2011-12 Union Budget for GDP (gross domestic rate) growth rate projections of up to 9.3%, fiscal deficit target of 4.6% and allowing FII investment in mutual funds, higher FII investment in corporate bonds and cut in surcharge for companies from 7.5% to 5% which continued cushioning the smooth sailing of the benchmark indices. On the global front, Asian markets were broadly higher tracking overnight gains of US markets, which gained on optimistic remarks from influential investor Warren Buffett and positive economic data. The US future indices too were showing green tick on the screen trade.

Back on the Dalal Street, all the sectors were well placed in green, however, stocks from Auto, Capital Goods, Bankex, Fast Moving Consumer Goods and Realty counters were posing immense buoyancy .The stocks from Auto sector have been bullish as the FM has not proposed to increase the excise duty. And the result, auto stocks emerged as the top gainers on the 30 stock BSE Sensex. The benchmark indices which lost their crucial physiological level approaching the close of the yesterday's trading session have again reclaimed their level of 18000 (Sensex) and 5400(Nifty) respectively. The broader indices too have gathered substantial gains inline with their larger counterparts. The overall market breadth on BSE is heavily in the favour of advances which have overtaken declines in the ratio of 1565:616, while, 90 shares remained unchanged on the index.

The BSE Sensex is currently trading at 18,083.24, up by 259.84 points or 1.46%. The index has touched a high of 18,103.66 and 17,964.39 respectively. There were 24 stocks advancing against just 6 declines on the index.

The broader indices were performing well at this point of time; the BSE Mid cap and Small cap indices surged 1.49% and 1.07% respectively. 

The top gaining sectoral indices on the BSE were, Auto up by 3.10%, CG up by 2.25%, Bankex up by 2.07%, FMCG up by 1.87% and Realty was up by 1.66%. While there were no losers on the index.

The top gainers on the Sensex were M&M up by 4.31%, Bajaj Auto up by 4.16%, Maruti Suzuki up by 3.01%, Tata Motors up by 3.00%,L&T up by 2.71%.

Bharti Airtel down by 1.03%, TCS down by 0.92%, Reliance Communication down by 0.87%, Wipro down by 0.71% and Tata Power down by 0.40% were the only losers on the index.

Meanwhile, Infrastructure Major Lanco Infratech, through its step down Australian SPV namely Lanco Resources Australia has concluded the deal for acquisition of 100% shares of Griffin Coal Mining Company and Carpenter Mine Management on February 28, 2011.

An amount of 483 million Australian Dollars has been paid for the said acquisition and further amounts of 100 million and 150 million Australian Dollars will be paid at the end of the 2nd and 4th year from the conclusion date as consideration in fulfillment of the conditions of the binding agreement. The process of acquisition of the two companies namely Griffin Coal Mining Company and Carpenter Mine Management has been formally concluded.

The S&P CNX Nifty is currently trading at 5,412.45, higher by 79.20 points or 1.49%.The index has touched a high of 5,416.15 and a low of 5,373.55 respectively. There were 40 stocks advancing against just 10 declines on the index.

The top gainers of the Nifty were Suzlon up by 4.29%, M&M up by 4.21%, Bajaj Auto up by 4.06%, Tata Motors up by 3.00% and Maruti Suzuki up by 2.76%.

Reliance Capital down by 1.60%, Bharti Airtel down 1.15%, TCS down by 0.77%, Wipro down by 0.67% and Reliance Communication down by 0.58% were the major losers on the index.

Whilst, R.P.P. Infra (RPP), construction company primarily engaged in the business of infrastructure development has won a mass housing contract in Republic of Gabon (RG) awarded by the ministry of housing, on 'Design, build and transfer model'. The contract is for construction and delivery of 10,000 houses over 36 months in various phases. The total contract is valued at Rs. 1500 crore. Under the agreement, the government will provide 120 hectares of free land for the construction of the houses.

As per the contract, RPP Infra will have the right to utilize 20% of the land given by the government for its own residential, commercial, institutional complexes and sell it in the market. If the company is unable to sell the complexes in the market over 36 months from the date of construction, the government will buy from RPP.

In Phase 1, 1500 out of 10000 dwelling units would be constructed across 70 hectares and will be handed over to RG. RPP Infra shall deploy cost effective methodologies and technologies, state of art tolls and machinery apart from skilled and unskilled resources to complete the project in time. The value of the Phase 1, is estimated at Rs 225 crores. The Government of Gabon has additionally offered RPP various incentives like tax SOP's, duty free import of machinery, tools, construction material and plant. Currently RPP is developing an integrated township project in Vallur, Northern Chennai ( a NTPC and TNEB joint venture).

All the Asian counterparts were trading in the green; Shanghai Composite gained 0.64%,, Hang Seng added 0.06%, Jakarta Composite rose 0.83%, KLSE Composite increased 0.39%, Nikkei 225 bagged 0.96%, Straits Times  gathered 1.61% and Taiwan Weighted  too was up by 1.39%.

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