Sensex's gains modest; banks rebound

Shares from the banking sector were in demand, after suffering a sharp decline in the past few sessions following the surprise hike in the cash reserve ratio (CRR) by the Reserve Bank of India last week.

The 30-shares BSE Sensex settled 47.35 points, at 14,402.90. It had opened higher, at 14,436.18, tracking the 345-point surge of Friday (16 February 2007). The BSE benchmark had surged to a fresh high of 14,479.18, and also stooped to a low of 14,372.07.

After staying firm throughout the day, the market looked appeared to tire in the late-afternoon session. Profit-booking in index pivotals capped gains.

The S&P CNX Nifty settled up 16.45 points, at 4,162.65.

The total turnover on BSE amounted to Rs 4204 crore. The market-breadth, a measure of the overall market strength, was just about positive, although not as much as it was earlier in the session. Broad-based participation from small-cap as well as mid-cap stocks was the add-on feature of today's trade. Against 1,340 shares advancing, 1,303 declined on BSE. As many as 56 scrips remained unchanged.

Among the 30-Sensex pack, 16 declined while the rest advanced.

Private sector ICICI Bank was the top gainer, up 3.12% to Rs 978, on a volume of 3.18 lakh shares. The scrip had surged from a low of Rs 943.30, its high being Rs 986.50.

Maruti Udyog advanced 2.56% to Rs 914.70, following a cut in petrol and diesel prices last week.

IT major TCS gained 1.53% to Rs 1310, as buying continued after the software exporter bagged an overseas order last week.

Tata Steel (up 1.11% to Rs 447), ITC (up 0.66% to Rs 175), and SBI (up 0.52% to Rs 1129) were the other gainers.

Index heavyweight Reliance Industries (RIL) advanced 0.72% to Rs 1417, on a volume of 5.77 lakh shares. Reliance Industries said on Thursday, its board will meet on 24 February 2007 to review plans to raise $2 billion, and consider possibilities for generating more funds to finance its interests. The private sector oil refiner had also struck a high of Rs 1430.

Ranbaxy Laboratories was down 0.64% to Rs 391, after it said federal officials conducted a search of the Indian drugmaker's US corporate offices in Princeton, New Jersey, on Wednesday. Ranbaxy, in a statement issued on Thursday, said the search came "as a surprise," and the company was not aware of any wrongdoing.

Hero Honda was the top loser, down 3.71% to Rs 716, on a volume of 38201 shares. It had slipped from a high of Rs 753.95.

Gujarat Ambuja Cements (down 3% to Rs 132.40), Hindalco (down 2.31% to Rs 148), and Reliance Communications (down 1.37% to Rs 460.10) were the other big losers.

L&T declined 0.12% to Rs 1690, after striking a high of Rs 1717.90. The engineering and construction company said on Monday it had secured a $ 250 million contract to set up offshore platforms and related amenities.

The banking sector was on fire. The BSE Bankex advanced 1.48%, and was the top gainer among BSE's sectoral indices. Centurion Bank of Punjab (up 3.49% to Rs 37.10), Oriental Bank of Commerce (up 2.75% to Rs 228.80), Kotak Mahindra Bank (up 2.21% to Rs 493), Federal Bank (up 1.69% to Rs 240), Canara Bank (up 0.79% to Rs 218), and SBI (up 0.52% to Rs 1129), were the other gainers from the banking space.

Metal shares saw renewed buying, tracking a rally in Japanese steel shares, which advanced on expectations of a further consolidation within the metal sector. The steel sector had undergone global mergers & acquisitions, which should help support global steel prices. In January 2007, Tata Steel won the bid for Anglo-Dutch steel major, Corus and Hindalco’s acquisition of US-based Novelis.

State-run Steel Authority of India (Sail) surged 5% to Rs 119.30. Ispat Industries (up 4.14% to Rs 15.10), Jindal Steel & Power (up 3.33% to Rs 2450), Sterlite Industries (up 1.10% to Rs 502), and Hindustan Zinc (up 1.05% to Rs 673) were the other gainers.

ABB gained 2.61% to Rs 3900, but was down from a high of Rs 4000. The company announced 42.6% growth in net profit in the December 2006 quarter along with a 5-for-1 stock-split. ABB has reported 42.6% growth in net profit in the December 2006 quarter to Rs 134.95 crore from Rs 94.61 crore in the December 2005 quarter. Income from operations surged 44.6% to Rs 1426.31 crore (Rs 985.72 crore).

ABB India had a record order intake during the year (year ended 31 December 2006), up 50%, at Rs 5,623.60 crore compared to Rs 3,764.50 crore last year. The record growth in order intake helped ABB India to increase its order backlog to Rs 3,372.30 crore, nearly 60% higher than the order backlog of Rs 2,103.20 crore at the beginning of the year.

ABB India plans to invest Rs 250 crore over the next two years to set up new factories, augment existing capacities and foray into new areas. The company will set up factories in Delhi, Baroda, Nasik, Mumbai and parts of Karnataka.

Aban Offshore, the largest private offshore oil drilling company, surged nearly 8% to Rs 1941, after its unit completed an open offer for Norwegian peer, Sinvest. Post the open offer, Aban Offshore group's stake in Sinvest has moved up to 97%.

Bajaj Electricals surged 16.74% to Rs 501, after the company said it is in advanced stage of negotiations to acquire an electrical firm based in western India. The acquisition will be finalised in the next one-and-a-half months. Bajaj Electricals is eyeing companies with weak financials but strong manufacturing, and product lines. The deal size could be up to Rs 100 crore, Chairman and Managing Director, Bajaj Electricals, Shekhar Bajaj, told newspersons at a meeting in Kolkata on Friday (16 February 2007).

Lokesh Machines gained 10% to Rs 148.30, after it informed it had received an order worth Rs 20 crore from Germany's Wenig Wemas. Lokesh Machines has designed and manufactured prototypes of CNC Lathe and CNC Vertical Machining Centre as per specifications of German machine tools giant, Wenig Wemas (Wenig), and its associates in Europe.

Telecom networking and systems integrator Spanco Telesystems surged 4.4% to Rs 220.15, after deciding to raise Rs 125 crore by issuing shares and warrants to ChrysCapital and UTI Investment Advisory. The price for the preferential allotment has been fixed at Rs 214.91 a piece, which includes a premium of Rs 204.91. The stock shrugged off worries of equity dilution following the issue. Assuming full conversion of warrants, the preferential allotment will lead to a substantial 35.8% dilution of equity.

The order from Wenig is initially for supplying 100 machines, dispatches scheduled to begin in April. The off-take could increase to 300 machines a year in the next three years.

Biocon surged 5.77% to Rs 464, on news that the firm plans to invest Rs 1000 crore in setting up a bio-pharma plant in Andhra. The bio-pharma plant will come up at the special economic zone (SEZ) near the port city of Visakhapatnam. Andhra Pradesh Chief Minister, Y S Rajasekhara Reddy, on Friday (16 February 2007), handed over the land needed for the plant to Biocon Chairman, Kiran Mazumdar Shaw.

Avaya GlobalConnect jumped 20% to Rs 322.20 on a volume of 5.13 lakh shares. It said on Thursday (15 February 2007) that a growth fund of Reliance mutual fund purchased a further 3.51% stake in the company, taking the fund's total holding to 6.13%. The stock had risen 3.7% on that day itself, boosted by the announcement, to Rs 268.50. The stock is up 32.1% from a recent low of Rs 210.65 on 10 January 2007.

Drugmaker Krebs Biochemicals & Industries rose by 5%, the maximum daily limit, to Rs 85.70, after the firm said its board will meet on 22 February 2007 to consider issuing 10.5 lakh shares to Ranbaxy Laboratories.

Power utility company, CESC, surged 7% to Rs 366.85 on renewed buying at the lower level after a recent correction. CESC is currently in the process of screening bids to kickstart the scrap sale of its idle plant and machinery assets at its locked Mulajore generating station at Kolkata. CESC has just received a set of bids from companies keen to take over the Mulajore assets. CESC's vintage Mulajore power station was shut down on 15 May 2004. Following the sale of the Mulajore plant and machinery, the 43-odd acres of land will be used to set up an industrial-cum-residential township venture to be executed by CESC Properties, a wholly-owned CESC subsidiary.

Most global markets were trading strong. The Nikkei average rose 0.24% on Monday, to trade at its highest in nearly seven years as retail stocks jumped on expectations of industry consolidation after Daimaru said it was considering a tie-up with Matsuzakaya Holdings Co. The Nikkei average rose 42.59 points to 17,918.24 on Monday, its highest since May 2000. It rose as high as 17,931.70 earlier in the day.

The Hang Seng index was up 29.49 points (0.14%), at 20,567.91.

Volatility, however, may accentuate this week ahead of the expiry of this month's derivative contracts on 22 February 2007. As per the latest data, NSE's total F&O open interest increased by Rs 1,939 crore to Rs 61,745 crore, of which futures open interest has gone up by Rs 1,136 crore, while the options open interest rose by Rs 803 crore. Marketwide rollover was at 18%, while the Nifty rollover was 28%.

FIIs have resumed buying. Foreign funds were net buyers to the tune of Rs 210.50 crore on 14 February 2007. FIIs had stepped up buying since February 2007 before the inflow slowed down. They turned net sellers on 13 February 2007. FII inflow was a robust Rs 2909.90 crore between 2 February and 8 February.

The strong inflow was triggered by an upgrade in India's sovereign rating to investment grade by global ratings agency, Standard & Poor's, on 30 January 2007.

The near-term trend on the bourses will be driven by budget expectations. The focus of the market will be more on sectors, which are expected to benefit from the budget proposals.

Most Asian markets are closed for the Lunar New Year holidays. Taiwan and China are closed for the entire week, while Hong Kong and Singapore are shut on Monday and Tuesday. South Korea, Malaysia, and the US markets are also closed on Monday.

The blue-chip Dow Jones industrial average edged up on Friday (16 February) to end at yet another record before a three-day holiday weekend. The Dow Jones industrial average rose 2.56 points, or 0.02%, to end at a record 12,767.57. The Standard & Poor's 500 Index slipped 1.27 points, or 0.09%, to finish at 1,455.54. The Nasdaq Composite Index dipped 0.79 of a point, or 0.03%, to close at 2,496.31.

In New York, on Friday, oil futures prices jumped more than $1 to end above $59 a barrel as traders covered some short positions before the President's Day holiday (Monday), when NYMEX and US financial markets remain closed. More unrest in OPEC member, Nigeria, also lifted oil prices.