Big Sensex push came from Infy, ITC, HDFC Bank, TCS

The 30-scrip BSE Sensex has recaptured its peak of 30 months earlier, thanks to a 1,770-point joint contribution from Infosys Technologies, ITC, HDFC Bank and TCS.

ITC, Infosys and TCS gained between 70 and 100 per cent in the past 30 months. HDFC Bank rose 37 per cent. The level is now 18,455; it was 18,360 around 30 moths ago.

Reliance Industries and ICICI Bank together dragged the Sensex down by 1,170 points, while Bharti Airtel and Reliance Communications (RCom) added 917 points to the fall. Reliance Industries has declined 25 per cent and ICICI Bank 20 per cent since January 25, 2008. Bharti Airtel and RCom are down 66 and 75 per cent, respectively.
 

MOVERS & SHAKERS
	Change in contribution	Price chg (%)
Gainers
Infosys Tech	680.05	87.10
ITC	377.34	70.06
HDFC Bank	368.12	37.19
TCS	344.32	100.85
Tata Motors	196.72	46.63
Losers
ICICI Bank	-629.47	-20.40
Reliance Comm	-557.91	-75.33
Reliance Ind	-541.28	-24.87
Bharti Airtel	-359.64	-65.51
Reliance Infra	-244.21	-47.13
Change over Jan 25, '08

Tata Motors, State Bank of India, Mahindra & Mahindra and HDFC contributed 650 points together. Of the 30 Sensex components, four have been replaced in the past 30 months. The new entrants added 180 points to the rise. Small contributions came from Cipla, Hindalco, Hindustan Unilever, Maruti Suzuki, ONGC and Wipro.

At 18,455, the Sensex is trading at a price to earnings multiple of 21.7 for trailing 12 months’ (TTM) net profit ending June. At this level, it trades at a P/E of 16.5 times estimated earnings for FY11. When, 30 months earlier, it was at 18,362, it was a little costlier, trading at a P/E of over 23 times for its TTM earnings for December 2007. The P/E has not moved with the Sensex, as four Sensex heavyweights have underperformed the market.

Indian markets regained momentum on the back of improving domestic macro prospects and positive news flow from global markets. Foreign institutional investors (FIIs) turned buyers in 2010, with net purchases of Rs 17,779 crore on the stock exchange platform and Rs 36,390 crore via public issues, qualified institutional issues and others. Global cues are expected to drive FII flows in the near term.

With signs of a global recovery underway, risk appetite has re-emerged. India has been one of the best performing markets since mid-March 2009, getting a fair share of foreign fund flows. Historically, Indian companies’ earnings have been among the least volatile among the emerging markets, indicate research analysts at HSBC.

There are indicators that the four biggest draggers are likely to recoup their losses with strong growth prospects in net earnings. Reliance Industries is expected to show strong recovery on earnings growth. ICICI Bank, which showed better than expected first quarter performance, is likely to be a major outperformer in the banking sector, indicate most banking analysts.

Banking analysts have an price target for ICICI Bank, above Rs 1,100; the stock was at Rs 1,017 today. They believe it is time for the bank to push for asset growth. Its retail side should also see modest growth, they say, apart from strong growth from corporate and infrastructure business. The management is sticking to a 15-16 per cent FY11 expectation.