Key benchmark indices trimmed gains in late trade after hitting fresh intraday highs. The 50-unit S&P CNX Nifty hit its highest level in 13-1/2 weeks in late trade. The barometer index, BSE Sensex, hit its highest level in more than 12 weeks. The Sensex was provisionally up 155.65 points or 0.89%, up close to 205 points from the day's low and off about 45 points from the day's high. Data showing stepping up of buying of Indian stocks by foreign institutional investors (FIIs) recently boosted sentiment. A private survey showing that the services sector grew at its fastest pace in six months in January 2012, also aided the rally as the market extended this year's strong gains.

Index heavyweight Reliance Industries (RIL) extended gains in late trade. Cement stocks extended Thursday's gains after monthly dispatches data. Realty stocks extended recent gains. Auto stocks rose on good vehicle sales in the month just gone by. Dr Reddy's Laboratories erased intraday gains triggered by strong Q3 results. Sun Pharmaceutical Industries hit record high. Banking stocks reversed initial losses. The market breadth was positive.

The market regained positive terrain after slipping into the red for a brief period after a flat opening. Key benchmark indices weakened to hit fresh intraday lows after alternately swinging between positive and negative terrain in morning trade. The Sensex recovered from intraday low and moved into the positive terrain in mid-morning trade after a private survey showed that the services sector grew at its fastest pace in six months in January 2012.

A bout of volatility was witnessed as key benchmark indices swung between positive and negative terrain in early afternoon trade. The market was range bound in afternoon trade. The market surged to hit its highest level in more than 12 weeks in mid-afternoon trade. The market trimmed gains after hitting fresh intraday high in late trade.

Foreign funds stepped up buying of Indian stocks, with a net inflow of a massive Rs 1941.23 crore on Thursday, 2 February 2012, as per provisional data from the stock exchanges. FIIs had mopped up shares worth a net Rs 1676.49 crore on Wednesday, 1 February 2012, as per provisional data from the stock exchanges. FIIs made substantial purchases of Indian stocks last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).

As per provisional figures, the BSE Sensex was up 155.65 points or 0.89% to 17,587.50. The index surged 198.68 points at the day's high of 17,630.53 in late trade, its highest level since 9 November 2011. The index fell 49.15 points at the day's low of 17,382.70 in morning trade.

The S&P CNX Nifty was up 48.35 points or 0.92% to 5,318,25, as per provisional figures. The index hit a high of 5,334.85 in intraday trade, its highest level since 31 October 2011. The index hit a low of 5,255.55 in intraday trade.

BSE clocked turnover of Rs 2916 crore, lower than Rs 3679.07 crore on Thursday, 2 February 2012.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,641 shares rose and 1,224 fell. A total of 115 shares were unchanged.

Among the 30-member Sensex pack, 22 rose while the rest fell. Sterlite Industries, Hindalco Industries, Tata Steel and Jindal Steel & Power fell by between 1.57% to 3.33%.

Index heavyweight Reliance Industries (RIL) rose 0.959% to Rs 836.50, with the stock extending recent strong gains. The stock was volatile. The stock hit a high of Rs 839.40 and a low of Rs 815.55. RIL said after market hours on Monday, 30 January 2012, that it proposes to buy-back its shares from the existing shareholders/beneficial owners other than the promoters/persons who are in control of the company from the open market. The company proposes to buy-back up to a maximum of twelve crore shares and a minimum of three crore shares. The buyback programme started on 1 February 2012 and will end on 19 January 2013.

The maximum price for buyback has been set at Rs 870 per share. The company has set aside Rs 10440 crore for share buyback, which represents approximately 7.22% of the company's total paid-up equity capital and free reserves as on 31 March 2011.

Dr Reddy's Laboratories was flat at Rs 1,635.30. The stock came off the day's high of Rs 1,688.80. The company announced during market hours today that consolidated net profit surged 87.8% to Rs 512.96 crore on 45.85% growth in net income from sales and services to Rs 2769.19 crore in Q3 December 2011 over Q3 December 2010.

Sun Pharmaceutical Industries rose 2.53% to Rs 557.05. The stock hit a record high of Rs 558 today.

ONGC rose 1.65% and Bhel gained 1.74%. The Empowered Group of Ministers (EGoM) will reportedly meet again in the next 10 days to discuss the mode and timing of stake sale in ONGC. However, disinvestment in Bhel was dropped from the agenda at the last minute for Thursday's meeting. The government plans to shed 5% equity or 42.77 crore shares in ONGC. After the dilution, its stake in ONGC will come down to 69.14% from 74.14%.

Banking stocks reversed initial losses. India's largest private sector bank by branch network ICICI Bank rose 1.24%. The bank's net profit rose 20.26% to Rs 1728.10 crore on 24.14% increase in total income to Rs 10483.73 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Tuesday, 31 January 2012.

ICICI Bank said advances increased by 19% year-on-year to Rs 246157 crore as on 31 December 2011 from Rs 206692 crore as on 31 December 2010. The bank said its Current and savings account (CASA) ratio increased to 43.6% at 31 December 2011, from 42.1% as on 30 September 2011. Net non-performing asset ratio decreased to 0.7% at 31 December 2011 from 0.8% at 30 September 2011 and 1.16% as at 31 December 2010. The bank had strong capital adequacy ratio of 18.88% and Tier-1 capital adequacy of 13.13% as on 31 December 2011.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) gained 1.58%. SBI recently said that the Government of India has agreed to inject approximately Rs 7900 crore into bank by way of preferential allotment of equity shares to help SBI achieve minimum 8% Tier I CAR by 31 March 2012. The country's biggest lender by assets didn't say when the government would infuse the capital. The government currently owns 59.40% of SBI.

India's second largest bank by net profit HDFC Bank rose 1.87%. HDFC Bank reported 31.4% growth in net profit to Rs 1429.70 crore on 35.6% increase in total income to Rs 8622.64 crore in Q3 December 2011 over Q3 December 2010. The result was announced on 19 January 2012.

HDFC Bank said its core CASA deposit ratio, adjusted for one-off current account balance of about Rs 4000 crore, was at 47.7% of total deposits as on 31 December 2011. The private sector bank said its asset quality remains healthy. The bank's capital adequacy ratio (CAR) remained strong at 16.3% as on 31 December 2011, against the regulatory minimum of 9%. The bank's Tier-I CAR was 11.2% as on 31 December 2011.

The Reserve Bank of India (RBI) has decided to allow all private sector banks to undertake Central and state government business, which is still a forte of public sector banks and three large private players, ICICI Bank, HDFC Bank and Axis Bank. Banks earn a fee while working as an agent of the central bank for collecting revenues as well as disbursing the payments under various schemes. At present, the three private banks are allowed to undertake government business in a limited way but RBI now said all the private lenders will be treated at par with their public sector counterparts.

According to the regulator, the move is aimed to enhance the quality of customer service in Government business through more competition, improving customer convenience by increasing the number of customer service outlets and broad basing the revenue collection and payments mechanism of governments.

Cement stocks extended Thursday's gains after monthly dispatches data. Jaiprakash Associates rose 2.71%, with the stock extending Thursday's 1.37% gain. The company's cement dispatches rose 27% to 1.96 million tonnes in January 2012 over January 2011.

ACC rose 1.86% to Rs 1,270, after surging 4.94% on Thursday. The stock hit a 52-week high of Rs 1,274.75 today. The company said during market hours on Thursday that its cement dispatches rose 8.78% to 2.23 million tonnes in January 2012 over January 2011. ACC's cement production rose 9.22% to 2.25 million tonnes in January 2012 over January 2011.

Ambuja Cements rose 1.38% to Rs 172.05, with the stock extending Thursday's 3.32% gains. The stock hit a record high of Rs 173.15 today. The company's cement dispatches rose 3.8% to 1.91 million tonnes in January 2012 over January 2011.

Realty stocks extended recent gains. From a recent low of 1,388.61 on 6 January 2012, BSE Realty index had surged 25.78% to 1,746.69 on 2 February 2012.

Unitech rose 2.99% on bargain hunting after slumping 7.04% on Thursday. Uninor, a joint venture between Unitech and Norway's Telenor, said on Thursday that it was shocked to hear that the Supreme Court has cancelled all its telecom licences. "We will study the order in detail and exercise all options available to ensure that Uninor continues to operate in India," Uninor said in a statement. Supreme Court in its verdict in 2G telecom scam on Thursday, 2 February 2012, quashed 122 telecom licenses issued after January 2008.

Unitech said that the Supreme Court verdict pertains to the telecom venture Uninor, which was issued 2G licenses in accordance with the government policy. Unitech is separate entity from Uninor and it will continue to focus on its real estate business, the company said. Unitech said that the company believes that Uninor will apply for the appropriate relief available under the laws to protect the interest of its subscribers, employees, vendors, distributors, investors and all other stakeholders.

Among other realty stocks, HDIL, DLF and Indiabulls Real Estate rose by between 0.75% to 1.62%.

Auto stocks rose on good vehicle sales in the month just gone by. India's largest car maker by sales Maruti Suzuki India rose 1.12%. The car major announced during market hours on Wednesday that its total sales rose 5.2% to 1.15 lakh units in January 2012 over January 2011. Domestic sales rose 0.6% to 1.01 and exports jumped 54.3% to 14,386 units in January 2012 over January 2011.

Maruti on Wednesday, 1 February 2012, introduced a shorter, cheaper version of its Swift Dzire sedan as part of efforts to retain its position as the country's largest car maker by sales. The new Dzire is 3.95 meters in length, qualifying it for a lower federal excise tax, compared with the current 4.1 meter-long model. The government imposes a 10% tax on cars measuring up to 4 meters in length. These cars can have a diesel engine of only up to 1.5 liters or a gasoline engine of up to 1.2-liters. An excise tax of 22% is imposed on cars beyond 4 meters in length.

India's largest utility vehicles and tractors maker Mahindra & Mahindra (M&M) rose 1.31%. The company's total automotive sales rose 22% at 44,717 in January 2012 over January 2011. The company's domestic sales stood at 41,369 units during January 2012, as against 34601 units during January 2011, an increase of 20%. Exports jumped 95% at 3,348 units while the 4-wheeler commercial segment which includes the passenger and load categories registered a growth of 35% at 13,725 units in January 2012 over January 2011

The company's tractors sales, however, registered a decline. Domestic tractor sales in January 2012 stood at 17,950 units, as against 19430 units during January 2011. Total tractor sales (domestic plus exports) in January 2012 stood at 19,354 units, as against 20,499 units for the same period last year. Exports for the month stood at 1404 units, having registered a growth of 31%, M&M said in a statement.

India's largest commercial vehicle maker by sales Tata Motors gained 0.22%. The company's total sales rose 16% to 87,465 units in January 2012 over January 2011.

Two wheeler makers declined. India's largest motorcycle maker by sales Hero MotoCorp fell 0.99%. The company reported 11.5% growth in sales to 5.20 lakh units in January 2012 over January 2011.

Bajaj Auto fell 0.06%. The company said during market hours on Thursday, 2 February 2012, that its total vehicle sales rose 8% to 3.37 lakh units in January 2012 over January 2011.

Mahindra Ugine Steel Company tumbled 5.65% after the company reported net loss of Rs 24.30 crore in Q3 December 2011, much higher than net loss of Rs 5.05 crore in Q3 December 2010.

India's services sector grew at its fastest pace in six months during January 2012 as new business swelled, extending the previous couple of months' positive trend into the new calendar year, a survey showed on Friday, 3 February 2012. The HSBC Business Activity Index, compiled by Markit and based on a survey of around 400 firms, bounced to 58 in January from 54.2 in December. That was the third month the index has been above the 50-mark separating growth from contraction.

The 3rd quarter earnings season is at its peak. Hindustan Unilever, National Aluminium Company and India Cements announce Q3 results on Monday, 6 February 2012. Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. Bharti Airtel, ONGC, Power Grid Corporation of India and Tech Mahindra unveil Q3 results on 8 February 2012. Tata Steel, Hindalco, ACC, Ambuja Cements and HPCL unveil quarterly results on 9 February 2012.

DFL, Tata Power, BPCL, Reliance Communications (RCom), Britannia Industries, Sun TV Network, Essar Oil and Neyveli Lignite Corporation unveil Q3 results on 10 February 2012. JSW Steel announces consolidated Q3 results on 10 February 2012. The company has already announced its stand-alone results.

Aditya Birla Nuvo, Oil India and Ashok Leyland announce Q3 results on 11 February 2012. State Bank of India, Cipla Indian Oil Corporation, Coal India, Sun Pharmaceuticals Industries and Steel Authority of India (Sail) unveil Q3 results on 13 February 2012. Tata Motors and Shipping Corporation of India unveil Q3 results on 14 February 2012. Ranbaxy Laboratories announces Q4 December 2011 results on 23 February 2012.

India's manufacturing sector grew at its fastest pace in eight months in January 2012 as factory output surged the most on record on increased domestic and foreign demand, a survey showed on Wednesday. The HSBC manufacturing purchasing managers' index (PMI), compiled by Markit, jumped to 57.5 from 54.2 in December. The factory output sub-index jumped to 62.9 in January from 55.8 in December, the biggest rise from one month to the next on record. Both the output and the new orders indexes rose to their highest level since May last year.

India's trade deficit widened to $12.7 billion in December from $8.0 billion a year earlier as export growth slowed due to falling global demand. But imports, specially in the non-oil segments, continued to grow. For the April-December period, the trade gap was $133.2 billion, compared with $96.2 billion a year earlier. India's merchandise exports in December grew 6.7% from a year earlier to $25.0 billion while imports rose 19.8% to $37.7 billion.

The government on Tuesday, 31 January 2012, lowered slightly its estimate of the country's growth in gross domestic product for the last fiscal year ended 31 2011, to 8.4% from 8.5%.

The Reserve Bank of India (RBI), last week, took liquidity easing measures by cutting the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at Third Quarter Review of Monetary Policy 2011-12. The central bank said that as a result of the reduction in the CRR by 50 basis points, around Rs 32000 crore of primary liquidity will be injected into the banking system. The central bank said the large structural deficit in the system presents a strong case for injecting permanent primary liquidity into the system.

The RBI kept its key lending rate viz. the repo rate unchanged at 8.5%. RBI has cut the baseline projection of GDP growth for 2011-12 to 7% from 7.6%. The growth-inflation balance of the monetary policy stance has now shifted to support growth, while at the same time ensuring that inflationary pressures remain contained, the central bank said.

The reduction in CRR can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates, RBI said. However, the timing and magnitude of future rate actions is contingent on a number of factors, RBI said. In the absence of credible fiscal consolidation, the Reserve Bank of India will be constrained from lowering the policy rate in response to decelerating private consumption and investment spending, it said. The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way, the RBI said.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on 2 January 2012. Polling for assembly elections in five states concludes in early March 2012. The annual budget is usually presented on the last working day of February.

Seven-phase polling for assembly elections in Uttar Pradesh begins tomorrow, 4 February 2012.

European stocks reversed initial losses on Friday, 3 February 2012, ahead of key US employment data that is seen as a barometer of health of the world's largest economy. Key benchmark indices in France, Germany and UK rose by between 0.23% to 0.38%.

Asian markets were mostly higher on Friday ahead of the key US jobs report due out later in the global day. Key benchmark indices in China, Hong Kong, Taiwan and Singapore rose by between 0.08% to 0.77%. Key benchmark indices in Indonesia, Japan and South Korea fell by between 0.02% to 0.60%.

China is considering increasing its participation in the rescue funds aimed at resolving the European debt crisis, Chinese Premier Wen Jiabao told media reporters on Thursday.

Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Friday, 3 February 2012. US stocks tallied limited gains for two of three benchmark indices on Thursday, 2 February 2012, as Wall Street looked to Friday's (3 February 2012) influential employment report for January 2012 as the next indicator of the economic recovery. The US jobs report is expected to show the US economy generated 150,000 jobs in January 2012, keeping the unemployment rate steady at 8.5%. In December 2011, the country added 200,000 jobs.