A bull story!

It takes a thousand voices to tell a single story.

One may be used to going to sleep after hearing a story. But the bulls seemed to have woken up after a shot nap on Monday with the PM confidently starting his story titled ‘India can get back to 9% GDP rate’. One story leads to another and the bulls are likely to hold sway on the bourses today as well, given the firm trend across Asian markets. US stocks ended mixed, with only the Nasdaq managing a small gain. European stock benchmarks also struggled for direction.

Back home, the broader market has witnessed some long-overdue easing in the past couple of days. Shares of several obscure companies with dodgy background had soared to astronomical levels. This is true not just for the Indian market but also overseas ones, sparking some concern about the sudden spurt in irrational exuberance.

Another area of worry is the sharply higher government borrowings, which has led to fears that private borrowers will find it tough to get loans. Reports say that S&P may reduce India's sovereign ratings if the government's fiscal situation worsens, which may well be the case if the UPA hikes allocation to its pet social schemes.

What this backdrop means is that the RBI will continue to be under pressure to maintain a fine balance between monetary policy and currency and debt markets. In a related development, the FM is set to meet bankers today to try and bolster lending to the industry. Despite talk of 'green shoots' of economic recovery, banks' credit growth has been pretty sluggish.

The farm loan target may be hiked by 16% in the budget. Textile companies are likely to receive a relief package. IT companies and EoUs may gain on reports that STPI tax benefits may be extended by three more years. In short, the bulls will hope this is the longest story ever told.

Kalpataru Power may come under pressure as the Maharashtra government may cancel a contract awarded to the company due to alleged shoddy work. Godfrey Phillips may soon launch Marlboro in India.

FIIs were net sellers in the cash segment on Tuesday at Rs9.55bn while the local institutions pulled out Rs1.43bn. In the F&O segment, the foreign funds were net sellers at Rs3.41bn. On Monday, FIIs were net buyers at Rs2.95bn in the cash segment. Mutual funds were net sellers at Rs409mn on the same day.

Indian markets staged a strong comeback after a witnessing some profit booking on Monday. All round buying in scrips across the sectors lifted the BSE Sensex to regain the 15,000 levels. The rally was led by the realty and the IT stocks. Even the Mid-Cap and the Small-Cap stocks were in demand. Finally, the Sensex surged 461 points or 3.1% to end at 15,127 and the NSE Nifty gained 121 points or 2.7% to shut shop at 4,551.

Shares of Areva T&D India gained by 2.5% to Rs346 after the company announced that it won four orders worth ~Rs3.5bn from Power Grid Corporation of India. The scrip touched an intra-day high of Rs355 and a low of Rs338 and recorded volumes of over 0.34mn shares on BSE.

Shares of Pfizer gained by 1.3% to Rs812 after reports stated that the company may buy RFCL’s animal healthcare division – Vetnex – from ICICI Venture for ~US$75mn. The scrip touched an intra-day high of Rs828 and a low of Rs801 and recorded volumes of over 38,000 shares on BSE.

Shares of PTC India surged by over 8% to Rs89.7 after the company announced its plans to set up a US$1bn equity fund to finance power projects in India, according to reports. The scrip touched an intra-day high of Rs91.4 and a low of Rs83 and recorded volumes of over 1.3mn shares on BSE.

Satyam Computer disclosed standalone unaudited financial results for the quarter ended December 31, 2008. The company’s Profit after tax for the October-December quarter stood at Rs1.81bn while the total income for the period was Rs22.06bn.

Operating profit (excluding other income) for the third quarter of FY09 is Rs3.64bn, while the operating profit margin is 15.87%. The PBIDT for the quarter stood at Rs2.76bn while the PBIDT margin was 12.51%.

The financial disclosure is part of the information Satyam had provided to select bidders, including Venturbay Consultants Pvt Ltd (the acquirer) and Tech Mahindra (the Person Acting in Concert), in connection with the bid process followed by the company to select a strategic investor. Satyam had provided access to certain non- public information to facilitate price recovery as the publicly available information about the company.

Satyam shares were locked at 10% upper circuit at Rs66.80 after hitting an intra-day high of Rs66.80 and a low of Rs58.20 and recorded volumes of over 10mn shares on BSE.

Shares of Tech Mahindra rallied by over 25% to Rs744 after hitting an intra-day high of Rs758 and a low of Rs575 and recorded volumes of over 2.4mn shares on BSE.

After staging a thumping return on the bourses, the bulls will look to build don to their upswing provided the global markets support. However, one must not forget that most of the anticipated recovery has already been discounted; this reduces the scope for a huge further rally though the bias remains positive. Technically speaking, the Nifty co9uld face crucial resistance at 4620-50 levels. Whereas, on the lower side, Nifty could get support at around 4375-4365 levels.