Market draws inspiration from overseas

Firm global markets, a psychologically important decline in inflation and provisional data showing heavy FII buying on Thursday, boosted the market. The BSE benchmark index traded in the green throughout the session.

However, the market failed to sustain the higher level as it approached a key resistance level.

The BSE Sensex’s provisional closing was 13,606.41, a gain of 119.25 points. The provisional closing of CNX Nifty was 3,883.95, a gain of 1%.

Nifty pared gains after scaling 3,908.45 in mid-afternoon trade. Technical analysts feel that 3,900-3,920 is a key resistance level for Nifty. Only a decision close to that level will indicate resumption of uptrend, they say. Nifty also has a strong support at 3,700 level, market participants feel.

Sensex swung 124.05 points between a low of 13,545.60 and a high of 13,669.65.

The market-breadth was strong. For 1,549 shares rising on BSE, 1,007 declined. A total of 71 shares were unchanged. Gainers outpaced losers by a ratio of 1.53:1.

The BSE clocked a turnover of Rs 4,150 crore.

PSU banks surged after data released at 12:00 IST revealed that inflation eased to 5.16% for the 12 months to 2 December, compared to 5.3% in the previous week. Canara Bank surged 9.9% to Rs 291.90, Bank of Baroda rose 4.7% to Rs 246 and Bank of India gained 4.4% to Rs 193.25.

State Bank of India gained 3% to Rs 1,261. The Standing Committee on Finance has endorsed the proposed legislative amendment to reduce State Bank of India’s shareholding in its subsidiary banks from current 55% to 51%.

Reliance Industries (RIL) declined in volatile trade. The stock shed 0.7% to Rs 1252.55. Reports today suggest, RIL has paid Rs 444 crore towards the third installment of advance tax due 15 December 2006. CLSA, a brokerage, while issuing an outperform rating on the scrip with a 12-month price target of Rs 1,265, recently stated that RIL's scrip performance over the next year will hinge on news flow.

Battered Tata Steel surged 5.5% to Rs 460. A strong 27.3 lakh shares changed hands in the counter on BSE. The stock rose on bargain-hunting, after a steep fall caused by concerns over its bidding war with Brazil’s CSN. Both are locked in a deadly duel over European steel maker Corus Group.

Reliance Communications surged 4% to Rs 466, extending its rebound of the last two days, amid reports of the company chasing Hutchison's India operations.

Hindalco surged nearly 4% to Rs 177.95, tracking firm global copper prices. The stock rose on a huge volume of 38.2 lakh shares on BSE.

Select IT pivotals gained, tracking overnight gains in their ADRs. Satyam Computer rose 3% to Rs 481.70, after its ADR rose 3.6% to $23.79. Infosys rose 1.8% to Rs 2,239; its ADR rose 2.1% to $55.20.

ACC (up 2.2% to Rs 1,055) held firm. The board of ACC has approved an expenditure of about Rs 1,480 crore to raise the capacity of the New Wadi plant, by about 3 million tonnes per annum.

Grasim gained 2.9% to Rs 2,741, extending its recent surge.

Asian and European markets were steady-to-firm. Key benchmark indices in Hong Kong, Japan and London were up 0.3 - 1%. US stocks surged on Thursday, driving the Dow industrials to a record close on strong earnings from companies such as investment bank, Bear Stearns Company, and an improving outlook for the US economy. The Dow Jones industrial average gained 99.26 points, or 0.81%, while the Standard & Poor's 500 Index jumped 12.28 points, or 0.87%, to end at 1,425.49. The Nasdaq Composite Index finished up 21.44 points, or 0.88%, at 2,453.85.

International rating agency S&P said on Thursday, it is looking to upgrade India’s sovereign rating.

As per provisional data, FIIs were net buyers to the tune of Rs 480 crore on Thursday (14 December), the day when the Sensex had surged 306 points. They were net sellers to the tune of Rs 96.90 crore on 13 December, the day when the Sensex had gained 186 points.

Nymex crude rose 27 cents, to $62.78 a barrel, extending Thursday’s near 2% surge due to an OPEC decision to cut production once again.