Sensex tests 11,000 in longest winning streak in 18 months

The BSE benchmark Sensex, in its longest winning streak in over 18 months, on Monday tested the 11,000 level on aggressive buying by funds on the optimism that govt stimulus packages might help revive global economies.

The Sensex, which regained the six-month high level of 11,000 points during the day, ended with a gain of 163.36 points, or 1.51 percent, at 10,967.22. It moved between 11,069.54 and 10,800.84 points.

The index rose over 14 percent in the last seven trading sessions, and is set for its longest run of gains since 3rd October 2007, when a succession of gains for 11 days ended.

The 50-share National Stock Exchange index Nifty rose by 40.55 points, or 1.21 percent, to 3,382.60. It moved between 3,417.80 and 3,334.15 points during the day.

Marketmen said firming trends overseas continued to support trading sentiment in domestic markets. They said Japan doubled stimulus spending and Chinese lending made a record jump.

The MSCI Asia Pacific Index rose 0.4 percent to 88.34, the highest since 12th January.

Trading sentiment turned bullish after Satyam Computer shot up 3.61 percent to Rs 48.85, after touching a high of Rs 54, ahead of the announcement of the highest bidder for a 51 percent stake in the firm on Monday.



Larsen and Toubro and Tech Mahindra, which bid for a controlling stake in Satyam, fell ahead of the announcement. L&T fell 0.59 per cent to Rs 824 while Tech Mahindra gained 13.71 per cent to Rs 359.45.

The metal sector index gained the most, by 5.49 per cent to 7,174.92, as barring one, all the 14 sectoral stocks ended with hefty gains on fund buying backed by reports of a firming trend in base metal prices in overseas markets.

Brokers said an improvement in global economies would boost infrastructure, which includes steel and cement, and spur investor demand for higher yielding commodities.

The banking index was the second-best performer, rising 5.07 per cent to 5,301.15, as 16 stocks in the segment rose on all-round buying while two closed lower.

ICICI Bank climbed 4.49 per cent to Rs 415.55, HDFC Bank by 4.84 per cent to Rs 1,096.70 and State Bank of India by 6.80 per cent to Rs 1,217.90.



The realty sector rose by 4.14 per cent to 2,125.76 after shares of DLF Ltd, Parsvnath, Shobha Developers and Indiabull Realestate recorded handsome gains.

The PSU sector index rose by 3.16 per cent to 5,876.29, auto index by 2.73 per cent to 3,384.74, capital goods index by 1.64 per cent to 7,492.30, power index by 1.63 per cent to 2,059.28, healthcare index by 1.49 per cent to 2,978.05, oil and gas index by 1.32 per cent to 8,083.22 and teck index by 0.01 per cent to 2,031.36.

However, consumer durables, IT and FMCG fell on profit selling by funds.

Tech Mahindra emerges highest bidder to acquire Satyam

Ending the three-month ordeal of about 50,000 employees, Tech Mahindra on Monday emerged as a top bidder with an offer of Rs 58 a share for a 31 per cent stake in beleaguered Satyam Computer, beating a strong rival L&T.

Tech Mahindra would acquire the stake in an all-cash deal, followed by an open offer for a 20 per cent stake to take management control of the company.



No immediate comment could be obtained from either Tech Mahindra or L&T.



After evaluating the bids, the government-appointed board of Satyam Computer on Monday announced that "its Board of Directors has selected Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited as the highest bidder to acquire a controlling stake in the Company, subject to the approval of the Hon'ble Company Law Board."



The Company was administered by a new Board appointed pursuant to the orders of the CLB dated 9th January 2009.



The process to select a strategic investor has reached this significant stage within three months of the new Board s first meeting.



"On behalf of all Satyamites and their families, we congratulate Tech Mahindra on being the highest bidder. The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the Company in its progress towards stabilization and growth," Satyam said in an announcement.

2,100 Infosys employees face axe

With companies keen on maximum utilisation of employees and low tolerance to poor performance in the backdrop of global economic turmoil, nearly 2,100 employees in software firm Infosys have faced the axe.

"Some of these employees have been asked to go while some have left on their own," V Balakrishnan, CFO of the city-headquartered Nasdaq-listed company, said on Saturday.


Prior to asking the employees to leave, they were put on a performance improvement course and those who showed no improvement were asked to leave while some others quit, he said.


"Tolerance to poor performance is very low given the current economic scenario," said Infosys CEO Kris Gopalakrishnan.


Usually, the employees who showed poor performance were given some more time to improve themselves, but this time there had been no such consideration, he said.


Both the officials said the sacking was part of the annual routine, which usually formed five per cent of the total number of employees but this time it was much lower.


Some of the employees had been "outplaced", Kris said, which refers to the firm hiring the services of placement agencies to help the employees to get placements in other firms.


Infosys has a workforce of 1,05,000, including trainees.

Microsoft ties up with HCL to outsource jobs to India

Computer giant Microsoft has signed a USD 170-million five-year contract with India's HCL for outsourcing work for its online business productivity suite.

HCL will provide 600 employees to support the contract and nearly 250 workers have already begun work on the project.Microsoft has not said whether this contract is to replace any existing agreement it has in India, or if this deal is an expansion of its current outsourcing scope.

Despite the recent job cuts, Microsoft has been expanding its online services business.Also, has recently announced plans to make its Business Productivity Online Suite, a software-as-a-service offering, available for trial and purchase in 19 countries

Japan PM unveils $150bn stimulus

Japan has formally unveiled its record $150bn (£105bn) stimulus package as it seeks to revive its flagging economy.

Prime Minister Taro Aso said the plan - worth about 3% of its gross domestic product - aimed to protect livelihoods and to foster future growth.

The 15.4 trillion yen package includes measures to boost fuel-efficient vehicles and consumer electronics.

Japan's economy has been battered by a collapse in exports and is facing its deepest recession since World War II.

Japan's ruling coalition plans to put the stimulus package before parliament by the end of the month.

'Opportunity'

"We are implementing a resolute policy in the form of economic crisis measures in order to protect the livelihoods of the people," Mr Aso told a news conference.

"The first of our objectives is to prevent the economy from falling through the floor. Another objective is to give a sense of security to the people," he said.

This is the government's third stimulus plan in the past year. It comes on top of 12tn yen of spending in earlier packages, as well as tax breaks and cash handouts.

It also creates a financial safety net for temporary workers, boost struggling firms and support regional economies.

Mr Aso said the new steps would be partially funded by issuing new government bonds.

Japan has been worst-hit among advanced nations by the global economic downturn.

Its exports have halved amid an unprecedented collapse in worldwide demand for the cars and electronic gadgets the country produces.

The government has a long-term goal to shift the economy's focus from exports to domestic sectors poised for major growth.

It wants to be a world leader in energy efficient technology and to bolster care for its huge and growing elderly population.

The aim is to create as many as two million jobs in the next three years.

Shares higher

On Thursday, shares in Tokyo gained as details of the stimulus plan emerged.

Japan's benchmark Nikkei 225 index closed at a three-month high, rising 3.74% to finish at 8,916.06.

Shares in carmakers and solar power-related firms gained.

"This may contribute to GDP for a year," said Masamichi Adachi, an economist at JP Morgan. "The consequences over the longer term are negative as we are piling up more of a fiscal burden. Bond issuance will go up from here on."

The package came out as figures showed Japan's machinery orders unexpectedly rose in February thanks to gains in the services sector.

Obama sees 'hope' for US economy

US President Barack Obama has said he sees "glimmers of hope" in the economy, but warned that the system remained under "severe strain".

Speaking after a meeting with his top economic advisers, he said there was still "a lot of work to do".

Mr Obama promised more action on the economy in the coming weeks.

He said he and his team had discussed the stability of the financial system, the housing market and plans to help banks clear their books of bad assets.

'A lot of hardship'

Mr Obama was speaking after a meeting at the White House with top strategists including Treasury Secretary Timothy Geithner and Federal Reserve chief Ben Bernanke.

He told journalists afterwards: "We're starting to see progress.

"If we stick with it, if we don't flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track."

The president cited increases in loans to small businesses, tax-cut cheques going out and new investments in infrastructure and energy projects as signs of hope for the economy.

But he added a note of caution, saying that the measures taken had to "translate into economic growth and jobs and rising income for the American people."

"And right now we're still seeing a lot of job losses, a lot of hardship, people finding themselves in some very difficult situations," he said.

"We still have a lot of work to do, and over the next several weeks you'll be seeing additional actions by the administration."

Oil jumps on strong share prices

The price of oil has risen sharply after big rises in US stock markets fuelled cautious optimism about the global economic outlook.

The price of US light crude rose $2.74, or 5.5%, to $52.12 a barrel. London Brent oil climbed $2.50 to $54.09.

The price rises were sparked by a sharp rally on Wall Street, where shares jumped by 2.9%, and by better than expected sales by leading US retailers.

Light trading in oil in the run up to Easter contributed to the sharp rise.

'Economic hope'

"A lot of little things are giving investors hope that maybe the economy has seen the worst," said Andrew Lebow at MF Global.

One of the biggest banks in the US, Wells Fargo, announced on Thursday that it expected to report record profits of $3bn (£2bn) for the first quarter of this year.

This drove shares on Wall Street higher.

Also on Thursday, The International Council of Shopping Centers (ICSC) announced that retail sales in March had fallen by 2.1% compared with a year earlier, less than many analysts had expected.

"People are buying oil when they see signs of economic hope," said Phil Lynn at Alaron Trading.

Banks drive US stocks up sharply

Big gains in banking stocks have pushed Wall Street sharply higher after one of the biggest banks in the US said it would make record profits this quarter.

Wells Fargo announced on Thursday it would make a profit of $3bn (£2bn) in the first three months of 2009.

The news sparked a significant bounce in financial stocks, led by Bank of America, which jumped 35%, and Wells Fargo itself, which climbed 32%.

As a result, the Dow Jones index rose 246 points, or 3.1%, to 8083.4.

'Record profits'

Other financial stocks also climbed sharply.

American Express closed up 19.8%, JP Morgan Chase climbed 19.4% and Citigroup gained 12.6%.

European markets also closed up, with the UK's FTSE 100 index rising 1.5%, Germany's Dax gaining 3.1% and France's Cac 40 climbing 1.8%.

The surge on Wall Street was largely down to the Wells Fargo announcement.

"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something. It's very good news," said Rick Campagna at 300 North Capital.

The troubles of the banking sector are seen as one of the root causes of the global economic downturn.

'Outstanding franchise'

Governments all over the world are focusing efforts to stimulate their economies on banks, primarily by trying to get them to start lending again.

Some banks have been nationalised, while governments have taken large stakes in others.

Investors were, therefore, delighted to hear that one of the biggest banks in the US is on course to record profitability.

Wells Fargo said it expected revenue of $20bn for the first quarter of this year, translating into "another quarter of double-digit revenue growth" of 16%.

Part of the strong performance was due to the bank's acquisition of Wachovia, which was the fourth-largest US bank, after it almost collapsed last year.

"Wachovia's outstanding franchise has proven to be everything we thought it would," Wells Fargo said.

Markets were also buoyed by better than expected March sales figures from some of the biggest retailers in the US.

The pressure is now on other banks to post strong results.

"I'm not sure everyone will be as successful, but we'd like to hope that the success will spill over," said Ted Aronson at Aronson-Johnson-Ortiz.

Some banks report results next week and, if they are weak, markets could fall back.

German government in Hypo offer

The German government has launched a takeover offer for troubled lender Hypo Real Estate (HRE).

The government's bank rescue fund said it was offering shareholders 1.39 euros per share, 15.8% higher than its last closing price of 1.20 euros.

But US investor JC Flowers, who has a 25% stake in HRE, has said he wants to remain a shareholder.

The rescue fund said if HRE became insolvent, there would be "substantial consequences" for financial markets.

Mr Flowers has previously signalled that he will not accept an offer below three euros a share.

A spokesman for the investor said: "There is still a clear preference to remain a shareholder and thus to be treated exactly the same as other shareholders that had to go under [Germany's bank] rescue shield."

Big losses

HRE has been Germany's highest-profile casualty of the financial crisis.

Last month, the German government moved to take an 8.7% stake in the firm, buying 60m euros ($67m; £54m) worth of new shares. The bank said at the time that the move was "a prerequisite for the intended recapitalisation of Hypo Real Estate" that the government "gain full control".

HRE reported a net loss of 5.46bn euros for 2008. So far, the government has provided it with loan guarantees of about 87bn euros.

The offer price values the shares the government does not already own at 290m euros.

Shares in HRE rose 15% in early trade.

Sensex remains up for the sixth day in a row

In volatile trading, the Bombay Stock Exchange benchmark Sensex on Thursday rose for the sixth straight day, the longest winning steak of the year on news of inflation easing and firming global cues.

The Sensex, which notched gains of nearly 12 per cent in the last five sessions, advanced by 0.57 per cent, or 61.52 points at 10,803.86.

During the day, it moved between 10,932.12 and 10,655.96 points.

However, the 50-share National Stock Exchange index Nifty, after touching a six-month high level of 3,400, fell to close with a loss of 0.90 points at 3,342.05.

While the market received support from firming overseas stock markets, the inflation rate falling to 0.26 per cent from 0.31 was a major booster.

Realty stocks were major gainers on agressive buying by funds on expectations of interest rate cuts by banks, leading to more home sales.

The realty sector index surged by 5.42 per cent to 2,041.33.

Commodity producers tracked gains in metal prices, while banking and financial company shares rose on expectations of a fresh stimulus move by the US.

The metal index rose by 3.72 per cent to 6,801.56, followed by the banking index, by 2.64 per cent to 5,045.27.

Trading in the metal sector picked up after the index of six metals rose 0.7 per cent on the London Metal Exchange, its second day of gains.

Wells Fargo expects record profit

US bank Wells Fargo has surprised investors by bucking the recession, saying it expects a record net profit.

The bank said profit will be $3bn in the first quarter, thanks to better-than-expected results at newly-acquired lender Wachovia.

Wells Fargo bought Wachovia, which was the fourth-largest US bank, after it almost collapsed last year.

"Wachovia's outstanding franchise has proven to be everything we thought it would," the bank said.

Wachovia merger

The bank said it expected revenue of $20bn for the quarter, translating into "another quarter of double-digit revenue growth" of 16%.

Banking giant Citigroup had initially tried to block the merger between Wachovia and Wells Fargo.

But the US Federal Reserve approved Wells Fargo's $12bn takeover after its all-stock offer.

Wells Fargo's results are set to include $372m in dividend payments to the US Treasury, which took a stake in many banks in exchange for a cash injection.

US financier Warren Buffett has a stake in Wells Fargo through his holding company, Berkshire Hathaway, which has lost its top credit rating from Moody's.