The market ended with sharp losses, on the back of selling pressure in MCG, metal and IT stocks. It opened on a firm note, but soon came under severe selling pressure as the day progressed. It saw sharp swings either ways in early trade.
The 30-share BSE Sensex shed 143.21 points or 1.02% to settle at 13,871.71. It had opened firm, at 14,029.04, on reports that the centre and states had agreed to phase out central sales tax (CST) over the next four years. It had surged to hit an all-time high of 14,060.35 at the onset of the trading session.
Sensex hit a low of 13850.38 in late trading. It swung around 210 points for the day.
The S&P CNX Nifty was down 35.25 points or 0.88% to 3,988.80.
The market breadth, however stayed strong, as buying continued for small-cap and mid-cap stocks. There were close to 1.5 gainers for every loser on BSE. Against 1,525 shares advancing, 1085 declined on BSE. A total of 65 scrips remained unchanged. The BSE Mid-Cap index rose 0.16% while the BSE Small-Cap advanced 0.98%.
The BSE clocked a turnover of Rs 4,508 crore as compared to Rs 4,312 crore on Wednesday.
Among the 30- Sensex pack, 24 declined while the rest advanced
ITC was the top loser, down 3.76% to Rs 168.75, on a high volume of 26.73 lakh shares. It had touched a high of Rs 176.85 in opening trade. Market men attribute the sharp fall to the 10% plunge in wheat prices on MCX. Also there are reports that tobacco products are likely be brought under the ambit of state-level value added tax (VAT). The centre has agreed to allow states to levy VAT on tobacco and tobacco products which is under additional excise duty.
Hero Honda (down 3% to Rs 755), Reliance Communications (down 1.96% to Rs 463.55) and Bhel (down 1.15% to Rs 2275) were the other losers.
Frontline IT shares came under selling pressure after their recent rally, with the BSE IT Index declining 1.50%. Satyam Computer lost 2.53% to Rs 502.10, on a total volume of 20.57 lakh shares. A block deal of 14.2 lakh shares was executed in the stock on BSE at Rs 514.50.
TCS (down 0.92% to Rs 1269.50), Wipro (down 2.43% to Rs 605.25) and Infosys (down 1.28% to Rs 2283) also edged lower.
Pharma major Dr Reddy’s was the top gainer, up 1.81% to Rs 823.15, on 2.89 lakh shares. It had struck a high of Rs 835.
L&T gained 0.93% to Rs 1490, for the second day in a row, after the company said on Wednesday it had bagged an overseas order worth over Rs 400 crore. The stock had hit a high of Rs 1503.70, which is a lifetime high for the scrip.
Tata Motors gained 0.90% to Rs 947.50, after its ADR jumped 6.1% on Wednesday to $21.69.
Index heavyweight Reliance Industries (RIL) was down 0.34% to Rs 1280.40 on 11.47 lakh shares. The stock touched a high of Rs 1300, while its low was Rs 1277.
Shares of oil marketing firms edged higher after crude oil futures fell below $59 a barrel due to mild weather in US, the world's largest heating oil market. US crude oil for February delivery fell $2.73, or 4.5 percent, to settle at $58.32 a barrel on Wednesday (3 January 2007). Besides the sharp fall in crude oil price, increase in aviation turbine fuel price hike carried out by oil firms also aided upmove in their share prices today. HPCL surged 4.08% to Rs 288, Indian Oil Corporation (IOC) rose 4.46% to Rs 469.80 and BPCL gained 1.95% to Rs 345. As per reports, IOC has sold oil bonds worth Rs 806 crore in the secondary market.
Info Edge was the top traded counter on BSE with total turnover of Rs 120.53 crore followed by Unitech (Rs 107.66 crore) and Reliance Industries (Rs 107.63 crore).
Metal stocks witnessed severe selling pressure, with the BSE Metal index declining 2% to 8,939.47. Metal shares were sold, on the back of weakening metal prices globally. Copper and zinc hit the lower circuit by over 4% each on the MCX after a fairly long bullish spell, on the back of copper price falling below $6,000 per tonne for the first time in eight months on the LME. Copper's fall was triggered by worries of surplus stock. The prices started falling in mid-December with rising inventories in the warehouses, and the slowing of the US economy, which could reduce the demand for copper as construction will be slower.
Sterlite Industries (down 1.67% to Rs 538), Hindalco (down 3.12% to Rs 174), Jindal Stainless (down 3.56% to Rs 119), SAIL (down 3.10% to Rs 89.40), and Hindustan Copper (down 0.60% to Rs 91) declined.
JSW Steel declined 3.05% to Rs 391.95 after it said it will hike galvanised steel prices by Rs 1,500 per tonne from 8 January due to an increase in zinc price.
Tata Steel dropped 1.66% to Rs 463.75. The company said on Wednesday, its saleable steel production in the first nine months of the 2006/07 fiscal year rose 11% from a year earlier to 3.66 million tonnes.
Top zinc producer Hindustan Zinc lost 3.37% to Rs 782, after it cut zinc prices by Rs 9,300 a tonne on Thursday, or 4.2%, to Rs 212,200 per tonne.
Among the side counters, Petronet LNG rose 5.40% to Rs 52.70 following reports on Wednesday that it will soon sign a deal to import 2.5 million tonnes of LNG from Chevron-operated Gorgon gas field in Australia, at a terminal that it is constructing at Kochi.
BSEL Infrastructure Realty gained 4% to Rs 68.50 after after its equal joint-venture with Unity Infraprojects was awarded a hotel project in the western city of Pune. Its net profit for December quarter surged to Rs 30.22 crore from Rs 4.37 crore rupees a year ago.
Iron ore exporter Sesa Goa rose 3.03% to Rs 1543 on reports that Arcelor Mittal had submitted a non-binding bid for a controlling stake in the iron ore exporter.
Outsourcing firm Hinduja TMT gained 2.24% to Rs 772.55 after reports that Hinduja Group is interested in buying a controlling stake in mobile phone operator Hutchison Essar
Budget airline Deccan Aviation advanced 2.14% to Rs 143.35 following reports that the company may post a modest profit for the October-December 2006 quarter. Much of the turnaround is on account of control on costs and surge in traffic in the month of December 2006, reports suggest.
i-flex solutions rose 0.62% to Rs 1974 after the company said on Wednesday that it was acquiring the Singapore consulting business of Capco. The acquisition of Capco Capital Markets Co. Pte. through i-flex's Singapore unit, would strengthen i-flex Consulting, which provides services to banks in the Asia-Pacific region, i-flex said in a statement.
Global Vectra Helicorp rose 0.97% to Rs 250.80 after the helicopter operator said it had signed a deal worth Rs 43 crore to provide helicopter services to Transocean Offshore International Ventures and its affiliates for three years.
Mold Tek Technologies jumped 10% to Rs 79.95 after it said on Wednesday its board would meet on 10 January to consider buying plastic packaging products maker Tech-Man Tools. The board would also consider spinning off the company's engineering knowledge process outsourcing division. It also said it would review a proposal for the possible acquisition of a US-based engineering company.
The Nikkei average rose 0.74% to close at an eight-month closing high on Thursday, the first trading day of 2007, with Toyota Motor Corp rising on news that it had become one of the 'Big Three' automakers in 2006, while other exporters advanced on a softer yen. The Nikkei finished up 127.84 points, at 17,353.67, the highest close since 21 April 2006. Tokyo markets were open for a half day of business on Thursday. They were closed Monday through Wednesday for the New Year holiday.
Hang Seng index was down 1.92%, while Straits Times (down 0.46%) and Seoul Composite (down 0.86%) also edged lower.
The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored into share prices, market players will closely watch what the company managements have to say about the outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts the Q3 earnings season on 11 January.
After Q3 results, the market will be eyeing the Union Budget 2007-08. A build up of long positions is likely on expectations of favourable policy announcements in the budget, according to dealers.
As per provisional data, FIIs were net buyers to the tune of Rs 168 crore on Wednesday (3 January), the day when the Sensex had gained 73 points and settled above 14,000 level for the first time. They were net buyers to the tune of Rs 128 crore in index-based futures, as they bought Rs 43 crore of individual stock futures that day.
US stocks ended little changed in their 2007 debut session on Wednesday, as minutes from the Federal Reserve's latest meeting renewed concerns about the strength of the economy and corporate profits and halted an early rally. The Dow Jones industrial average rose 11.37 points, or 0.09%, to end at 12,474.52. The Standard & Poor's 500 Index slipped 1.67 points, or 0.12 %, to finish at 1,416.63. The Nasdaq Composite Index advanced 7.87 points, or 0.33%, to close at 2,423.16.