Sensex sheds 76 points on profit taking

The market’s initial optimism caused by US Senate’s nod for Indo-US nuclear deal and a sharp fall in global crude oil price, proved short lived as investors booked profit after a string of record highs registered over the past few days. Profit taking was partly triggered by interest rate worries after the latest data showed the wholesale price index rose 5.30% in 12 months to Nov. 4, higher than the previous week's 5.09 percent due to an increase in the prices of food articles and manufactured products.

Banking, metal, auto and cement shares edged lower. A number of small-cap and mid-cap stocks lost ground. But oil-marketing firms surged as crude oil price fell to one year low on Thursday. Crude oil price declined sharply by $2.50, or 4.3%, to $56.26 per barrel on Thursday, the lowest close since 18 November 2005.

The market breadth was quite weak. 1871 shares declined on BSE as compared to 657 shares that rose. 63 shares were unchanged. Losers outpaced gainers by a ratio of 2.8:1. The breadth weakened continuously during the course of the trading session today. Although the Sensex has been hitting a string of new highs, what has been lacking is participation from across the board. The market-breadth has remained weak on a number of occasions. Some upward spike is being witnessed in side counters on a selective basis.

The 30-share BSE Sensex lost 76.41 points or 0.5% to settle at 13,429.48. The S&P CNX Nifty lost 24.05 points or 0.6% to 3,852.80.

Volatility was high today as the Sensex moved between positive and negative territory throughout the day today. Sensex had opened with a huge upward gap of 172.15 points at a record high of 13,678.04 but it came off immediately after striking that high. It was index heavyweight Infosys Technologies that caused a spike in Sensex at open followed by its sharp fall from that record peak instantly. Infosys spurted over 9% at open on BSE due to a punching error. The stock has a near 12% weightage in Sensex.

BSE clocked a turnover of Rs 4472 crore today compared to Thursday’s Rs 6125.73 crore.

Revision in earnings estimates by brokerages for companies following strong Q2 results and strong FII inflow has boosted the bourses in the past few weeks. Sensex is up 42.8% in calendar 2006 so far.

FII inflow for calendar 2006 has reached $7.8 billion (till 14 November) compared to a record inflow of $10.7 billion in 2005. A combination of buying by long term US pension funds and insurance companies and hedge funds has boosted FII inflows. A strong global liquidity, too, has aided the fund flow. There are new FIIs registering with Sebi. Since January this year, there has been an addition of over 150 FIIs, and the aggregate now stands at 985.

Oil marketing firms surged as crude oil price fell to one year low on Thursday. BPCL (Rs 378.90), Indian Oil Corporation (Rs 511.05) and HPCL (Rs 319.90) rose between 4.7% 6.3%.

NTPC jumped nearly 4% to Rs 140.30. The company said on Friday it planned to invest Rs 3425 crore to set up a 520-megawatt hydro power project.

Housing finance major HDFC rose 3.3% to Rs 1608 on the reckoning that the housing loan demand may remain strong. The stock hit a high of Rs 1616 which is a lifetime high for the scrip.

Dr Reddy’s Lab lost nearly 5% to Rs 738 after it raised $200 million in an issue of American Depositary Receipts, below market estimates of up to $260 million. It priced the issue at $16 per ADS.

Infosys shed 0.1% to Rs 2190. The stock had surged over 9% in opening trade to Rs 2401 due to a punching error.

Sterlite Industries plunged 6% to Rs 510 as fall in world copper prices accelerated, amid emerging signs of a supply overhang, with Chinese speculators again offloading future positions. But Hindalco fell only marginally by 0.5% to Rs 174.75. Sterlite had on Thursday filed for a mega $2 billion ADR issue.

The latest data showing a rise in inflation pulled shares of private sector banks lower ICICI Bank lost 1.2% to Rs 877 and HDFC dropped 1.9% to Rs 1122. But State Bank of India (up 0.7% to Rs 1229) ended in the positive zone after a block deal in FII segment was executed in the scrip at 19% premium to the market price.

The sharp fall in oil price weighed down oil exploration major ONGC. The stock lost 2.3% to Rs 850.20.

Reliance Industries lost 0.4% to Rs 1258.10. Reliance Industries has bagged an offshore exploration block in Timor Leste. RIL will have a majority interest and operator-ship in that block, RIL said today. Reports on Thursday said Reliance Industries has raised the gas production estimate of its D-6 block in the Krishna Godavari basin to 120 mmscmd from the initial development plan of 40 mmscmd

Zee Telefilms rose 0.4% to Rs 334.50. Zee Telefilms today said the Bombay High Court has approved its demerger scheme which paves the way for setting the record date for the demerger of the cable and distribution and news and regional broadcasting businesses of Zee into Wire & Wireless India Ltd (WWIL) and Zee News Ltd (ZNL) respectively. The Record Date is likely to fall in the latter half of December. The shareholders of the company as on the record date will be allotted shares in WWIL & Zee. The company expects this process to be completed by February 2007

Cement shares dropped. Gujarat Ambuja Cements shed 2.3% to Rs 135.65, Grasim shed 1.3% to Rs 2680 and UltraTech Cement shed 2.4% to Rs 883. ACC ended flat at Rs 1087.95. Swiss cement major Holcim on Thursday acquired additional 3.6% stake in Gujarat Ambuja Cements raising its holding to 18.4%, for Rs 685 crore. This has raised expectations that the consolidation in the cement sector may gather further pace in the coming months.

Auto shares dropped. Hero Honda lost 1.9% to Rs 692.50, Bajaj Auto shed 0.9% to Rs 2564, Maruti Udyog lost 0.4% to Rs 889.30 and Tata Motors dropped 0.6% to Rs 808.40.

Chennai Petroleum Corporation jumped 5.9% to Rs 222.50 on reports the bottomline of stand-alone refiners will get a boost as they have discontinued offering discount to oil marketing companies on sale of kerosene and diesel.

Thermax rose 3% to Rs 367 extending Thursday’s rally triggered by strong Q2 results. But the stock came off the higher level after it had spurted as much as 17.2% at one point of time to Rs 417. Volumes in the scrip were substantial of 14 lakh shares.

Zandu Pharmaceutical Works rose 2.3% to Rs 4753 after its board approved a bonus share issue of one share for every three held.

Areva T&D India rose 2.6% to Rs 834 on strong business prospects after the US Senate on Thursday approved the Indo-US nuclear deal.

Infrastructure Development Finance Company (IDFC) dropped after early rise. The stock shed 2.2% to Rs 76.85. RBI has raised FII investment ceiling in the scrip to 49%.

Gateway Distriparks rose 1% to Rs 166.30 after RBI raised FII investment ceiling in the company to 100% of its equity capital