Sensex corrects for a change

The Sensex was confined to a narrow range of 112 points today. However, the turnover on BSE was in excess of Rs 6,000 crore, a striking Rs 6,084 crore by the end. This is approximately 29% higher compared to Monday’s turnover (Rs 4719 crore).

The turnover surged on the back of three huge block deals of 23.14 lakh shares each in TCS, at an average Rs 1299.26 per share, in opening trade. The counter was the top-traded on BSE with a turnover of Rs 918.28 crore. The TCS stock was down 0.77% to Rs 1295.05, on an aggregate volume of 70.67 lakh shares. Block deals were also struck in many other counters, leading to the high turnover.

The Sensex remained highly volatile throughout the day, moving in and out of positive ground, on account of a mixed trend in pivotals. The fall became more pronounced in the last 30 minutes of trade, as selling intensified.

The 30-shares BSE Sensex settled 37.71 points (0.26%) lower, at 14,515.90. The benchmark Sensex had opened in the red, at 14,479.58. It struck a fresh all-time high of 14,564.80, as buying began in index pivotals. The benchmark index also struck a low of 14,452.78.

The S&P CNX Nifty declined 19.45 points (0.46%), to 4,195.90. It had surged to an all-time high of 4,228.15, in intra-day trade.

The market-breadth was positive. For 1,399 shares advancing on BSE, 1,271 declined. Just 48 scrips remained unchanged. The BSE Small-Cap Index closed at 7,662.75, up 0.09%, while the BSE Mid-Cap Index gained 0.44% to settle at 6,182.35.

Among the 30-Sensex pack, 18 declined while the rest advanced.

Reliance Communications (RCL) was the top loser, down 5.13% to Rs 488.65, on a volume of 29.21 lakh shares. Misgivings about possibility of rapid equity dilution due to the large FCCB issue impacted the scrip.

The conversion premium for the issue is 30% over a reference share price of Rs 508.64. The relatively lower-than-expected premium raised concerns that there can be early dilution of equity within just one or two years.

Reliance Communications (RCL) on Monday (5 February 2007) raised a huge $1 billion through a convertible bond issue. As per reports, the company is battling Britain's Vodafone Group and other domestic firms in its bid to buy rival Hutchison Essar. RCL raised $1 billion through a convertible bond issue.

RCL is a front-runner, along with Vodafone, for 67% stake in the number-four operator, Hutchison Essar, owned by Hong Kong's Hutchison Telecommunications International.

Hindalco (down 2% to Rs 174.50), HDFC Bank (down 1.58% to Rs 1084), and Maruti Udyog (down 1.39% to Rs 950), were the other big losers.

REL was the top gainer, up 2.10% to Rs 560, on a volume of 3.87 lakh shares. The stock had surged to a high of Rs 566.80 in intra-day trade. Interest in the power sector assets of Globeleq, and a contract to build a large power project in Haryana have triggered a solid rebound in Reliance Energy over the past few days.

Ranbaxy gained 1.35% to Rs 420, after entering into a research and development pact with GlaxoSimthKline that modifies and expands their strategic alliance since 2003, to provide the company expanded drug-development responsibilities and further financial opportunities.

ICICI Bank advanced 1.39% to Rs 960, on a volume of 2.11 lakh shares. The stock had recovered from a low of Rs 946.

Index heavyweight Reliance Industries (RIL) was highly volatile. Finally, it settled unchanged at Rs 1388, on a volume of 6.02 lakh shares. RIL recovered from a low of Rs 1382 and surged to an intra-day high of Rs 1408.

Pidilite Industries was down 0.64% to Rs 115.90, on high volumes of 11.12 lakh shares, after a block deal of 10 lakh shares was struck in the counter at Rs 119 per share by 10:36 IST.

Recently-listed auto component maker Autoline Industries surged 20% to Rs 391.35, extending its surge post listing. The stock clocked 62.37 lakh shares on BSE. The company made only a modest debut at Rs 261.15 on BSE on 31 January 2007, compared to the IPO price of Rs 225. It had settled at 257.95 on the day of debut. The very next day, Autoline had slipped to Rs 250.20, from where it has gained 56.4% in just three trading sessions.

Optical storage device maker Moser Baer India jumped 6.65% to Rs 388 after agreeing to acquire OM&T B.V., an optical research and development firm. OM&T is a subsidiary of Philips Electronics.

Cinema operator Pyramid Saimira Theatre climbed 5%, the maximum daily limit, to Rs 442.40, on plans to set up an equal joint venture for a chain of cinema halls in Malaysia. The company has decided to invest Rs 240 crore in the joint venture with Asian Integrated Industries.

BSEL Infrastructure Realty climbed 2.10% to Rs 95.80, after its subsidiary entered into an agreement to buy four plots in Emirates City to build houses.

Gammon India dropped 5.40% to Rs 390, after the company said on Tuesday the stock market regulator was against the listing of a subsidiary in the next one year.

Sebi, according to Gammon India, advised investment bankers that a proposed initial public offer (IPO) of Gammon's subsidiary could not be allowed for a year. As per Gammon India, Sebi made the remark in a letter to bankers, who were to handle the IPO of Gammon Infrastructure Projects (GIPL).

JSW Steel rose 2% to Rs 464, after the company got a go-head to utilise the waste gases to generate power for internal consumption. The proposal was approved by an executive body of the Clean Development Mechanism, United Nations Framework Convention of Climate Change.

With this clearance, the company will utilise the waste gases emitted by JSW Steel’s Karnataka plant (7,500 tonne per day) for generating power, which will be consumed for running its own operations. The project thus contemplates reduction of emission from both the steel and power plants.

Punjab Tractors gained 1.40% to Rs 283, amid reports that several auto companies were interested in bidding for private equity firm Actis’ 29% stake in the firm. According to the report, Tatas may bid for the private equity firm's holding in the north-India based tractor unit. Actis had given financial services firm, Citi, the mandate to call bids from potential buyers for its stake in Punjab Tractors (PTL). Other players who have evinced interest for Actis' stake include Mahindra & Mahindra, TAFE and Sonalika Tractors, reports suggest.

Sintex Industries rose 0.57% to Rs 221.10 on NSE, after the company said on Monday it expects annual savings of Rs 14.40 crore from a new 18.9-Megawatt captive power plant. The power plant set up at a cost of Rs 45 crore will serve its plastics as well as textiles division, the company said in a statement on Monday.

Bharat Electronics gained 6.97% to Rs 1,507.50, boosted by reports that it will sign a memorandum of understanding with Northrop Grumman Corp., the third biggest US defence contractor.

Syngenta India gained 5.79% to Rs 412.35, on expectations of its annual results. The company unveils its results for the year ended 31 December 2006 on 12 February 2007.

Ashok Leyland advanced 2.35% at Rs 50, after the company reported 67% rise in its January vehicle sales, to 9,650 units, over the year ago period. Ashok Leyland’s domestic sales rose 62% to 9,096 units from 5,618 units, while exports jumped to 554 units from 169.

FM Radio operator Entertainment Network India surged 4.61% to Rs 328, after its subsidiary bagged the rights for maintenance of advertisements at Indira Gandhi International Airport, New Delhi. The subsidiary, Times Innovative Media, has been selected for designing, developing and maintaining advertisements on specified locations at the Indira Gandhi International Airport, New Delhi. TIMPL is a wholly-owned subsidiary of ENIL, and operates its Out of Home Media business under the brand name "Times OOH Media".

BSEL Infrastructure Realty climbed 2.10% to Rs 95.80, after its subsidiary agreed to buy four plots in Emirates City to build residences.

The Nikkei average finished up 0.36% on Tuesday, recouping some losses from the previous day's decline as Olympus Corp and Nikon Corp gained after both camera makers posted big rises in quarterly earnings, while raising forecasts. The Nikkei finished up 62.06 points at 17,406.86. It fell nearly 1.2% on Monday, booking its biggest one-day loss in a month.

The market had surged in the earlier three trading sessions, in what is largely seen as a pre-budget rally. The BSE Sensex added 424.98 points (3%) from 14,090.92 on 31 January 2007.

With the US Federal Reserve opting to keep interest rates steady at its 31 January 2007 meeting, the sentiment has received a big boost. The market also drew inspiration from the fact that RBI had raised the GDP growth forecast to 8.5 - 9% from an earlier 8%, on the same day as the Fed meeeting. The barometer index is up 5.2% in calendar 2007 thus far.

FIIs were net buyers to the tune of Rs 608 crore in index-based futures on 5 February 200. They were net sellers to the tune of Rs 167 crore in individual stock futures that day.

As per reports in a section of the media, the government may raise short-term capital gains tax on shares to 15% from 10%. The proposal being market sensitive, opinion is divided within the finance ministry in this regard, the report indicates.

US stocks ended mixed on Monday, with losses in shares of Microsoft Corporation weighing on technology shares. The Dow Jones industrial average gained 8.25 points, or 0.07%, to end at 12,661.74, while the Standard & Poor's 500 Index dipped 1.40 points, or 0.10%, to finish at 1,446.99. The Nasdaq Composite Index fell 5.28 points, or 0.21%, to close at 2,470.60.

Crude oil rose in New York on speculation that colder-than-normal temperatures in the US will increase demand for heating fuels. Crude oil for March delivery rose as much as 41 cents, or 0.7%, to $59.15 a barrel on the New York Mercantile Exchange. Brent crude oil for March settlement rose as much as 40 cents, or 0.7%, to $58.50 a barrel on London's ICE Futures exchange.