Market collects 95 points, led by FMCG, IT and capital goods

The benchmark index, which traded lacklustre throughout the day, suddenly found vigour and spurted over 100 points, to briefly cross the psychologically significant 13,000 mark. The Sensex attained an intra-day high of 13,004.40. Much of the spurt may have been on account of short covering in the derivatives segment, since the March 2007 contracts expired today.

Shares from FMCG, Capital goods and IT sectors received support, while those from banking, auto and metals were offloaded.

The 30-share BSE Sensex settled 95.32 points (0.74%) higher, at 12,979.66. Its low for the day was at 12,832.69.

The S&P CNX Nifty gained 37 points (0.98%), to 3,798.10.

Volatility was a significant feature with the markets dancing on F&O as well as global cues. The market is expected to trade range-bound for the next of couple of trading sessions. A global trigger may, however, instill some faith in investors.

The total market turnover stood at Rs 64,695.09 crore compared to Rs 56,773.14 crore on Wednesday. Of the total turnover on NSE, the cash segment accounted for Rs 10057.08 crore, and F&Os for Rs 50961.50 crore. The total turnover in BSE's cash segment amounted to Rs 3676.51 crore.

The market-breadth, which reflects the overall health of the market, was strong throughout the day. Buying spread over to small-cap as well as mid-cap stocks. Against 1,585 scrips advancing, only 924 declined on BSE. A total of 80 scrips also remained unchanged.

The BSE Mid-Cap Index advanced 22.59 points (0.43%), to 5,319.17, while the BSE Small-Cap Index rose 65.34 points (1.04%), to 6,377.79.

Among the 30-Sensex pack, 23 advanced while the rest declined.

The BSE IT Index gained 43.23 points (0.89%), at 4,875.08. IT stocks gained on renewed buying, after being under pressure for the last few sessions. Arresting a three-day strong rally, the rupee on Thursday fell about 36 paise, to 43.40/43 levels, in late-morning trade due to buying of dollars by banks, probably on behalf of the Reserve Bank of India (RBI).

In active trade at the Interbank Foreign Exchange (forex) market, the Indian unit resumed weak at 43.30/32 per dollar from Wednesday's close of 43.04/05 a dollar and later tumbled to a low of 43.40/43 per dollar during late-morning deals.

The rupee had climbed to its highest levels in more than seven years following a strong 69 paise surge in the last three sessions, due to heavy dollar sales by banks, which were facing acute liquidity crunch.

Oil companies also were believed to be making month-end dollar purchases, as global crude oil soared to around $64 a barrel.

IT major TCS was the top gainer, up 3.58% to Rs 1244, on a volume of 4.07 lakh shares.

Satyam Computer gained 1.62% to Rs 463. The company said on Wednesday, it had entered into a five-year contract with Applied Materials, whereby it will provide application development, maintenance, and support plus business transformation core technology services to Applied Materials through a managed services delivery model.

Satyam Computer informed of having created a dedicated development center for Applied Materials. The facility will be part of Satyam's Electronic City campus at Bangalore. As per media reports, the deal with Applied Materials is estimated at about $200 million.

Among other IT stocks, Infosys (up 0.13% to Rs 1995) and Wipro (up 1.58% to Rs 567) also edged up.

Mphasis (up 2.78%), HCL Tech (up 4.28%), NIIT (up 4.50%), and Rolta (up 2.32%) were the gainers from the mid-cap IT space.

Strong purchases happened for shares from the capital goods sector, in anticipation of robust results in the forthcoming quarters. As a result, the BSE Capital Goods Index was up 108.51 points (1.22%), at 9,000.14. Engineering & construction major L&T advanced 3.56% to Rs 1622, on a volume of 1.94 lakh shares. Thermax (up 2.10%), Aban Offshore (up 6.40%) and Suzlon Energy (up 4.94%) gained. Aban Offshore informed it had completed acquisition of residual 1.99% stake in the Norwegian subsidiary, Sinvest ASA.

Bike manufacturer Hero Honda rose 2.75% to Rs 674. It had surged to a high of Rs 685.90.

Gujarat Ambuja Cements (up 3.20% to Rs 105.50) and SBI (up 2.81% to Rs 1001.55) were the other gainers.

The BSE FMCG Index ended 34.97 points higher (2.08%), at 1,712.21. HLL (up 2.63% to Rs 203), ITC (up 1.95% to Rs 146.20) and Marico (up 4.20% to Rs 61.10) advanced.

Index heavyweight Reliance Industries (RIL) was up 0.38% to Rs 1353.80, on a volume of 8.31 lakh shares. Reports suggest that RIL was scouting for partners in Europe and the United States, to help speed up its domestic retail expansion. RIL will be interested in partnering with a US specialty retailer. The company aims to open about 2,000 fresh stores over five years.

According to another report, RIL is likely to join the race for the $1-billion Vizhinjam port on the Kerala coastline. The state government has decided to call fresh tenders from private players interested in developing the port. RIL was eyeing participation in a major port project on the west coast, which could rival Colombo's prominence, and hence the early interest in Vizhinjam International Seaport (VISL) that falls on the international shipping line.

ACC was up 0.18% to Rs 736.25. The cement pivotal will pump around Rs 4000 crore in three years, pushing its annual cement production capacity to 27.5 million tonnes. This will be an increase of over 38% in the company’s current capacity of 19.9 million tonnes.

The capital expenditure will be carried out between 2007 and 2009. The capital expenditure has been envisaged for plants in New Wadi, Karnataka, and Bargarh in Orissa. ACC has already completed the expansion and modernisation of its Lakheri plant, at Rajasthan, this year.

HDFC Bank was the top-loser, down 2.25% to Rs 934, on high volumes of 13.53 lakh shares, after a block deal of 12.37 lakh shares was struck in the counter at Rs 933 per share by 15:22 IST. It had dipped to a low of Rs 927.30. The Bankex shed 27.60 points (0.42%), to settle at 6,507.65.

Bajaj Auto (down 1.85% to Rs 2418) and Hindalco (down 1.85% to Rs 127.10) were the other losers. The BSE Metal Index had shed 28.29 points (0.34%), to 8,346.06.

Shares of real estate developers surged on reports that most of the derivative contracts for March 2007 had rolled over to the April 2007 series. Sobha Developers (up 8.70%), Akruti Nirman (up 5.95%), Indiabulls Real Estate (up 5.85%) and Parsvnath Developers (up 4.10%) surged, that too on high volumes.

A block deal for 21.95 lakh shares was struck in the Shreyas Shipping & Logistics counter at Rs 94 per share, after which the stock surged to a high of Rs 103.40. It was up 20% at Rs 103.40, on cumulative volumes of 24.55 lakh shares. The deal constituted almost 10% of the company’s equity. The equity base of the company is Rs 21.96 crore, with a face value of Rs 10 per share.

Idea Cellular topped the volume chart on BSE, and the scrip ended 5.54% higher at Rs 95.30. Around 45.09 lakh shares changed hands in the Idea Cellular counter today.

PSU steel maker SAIL was second in terms of volume. The scrip ended up 1.86% to Rs 112, on a decent volume of 19.15 lakh shares.

The third in volume terms was Gujarat Ambuja Cements. The scrip ended 2.30% up at Rs 104.60, as 18.11 lakh shares changed hands in the counter on BSE.

Titan Industries gained 2.62% to Rs 832.75, ahead of its plan to foray into the optical eye-wear business by launching a retail chain, Titan Eye+, in Bangalore. Titan Industries will offer products, including its own brands, in the fashion eye-wear category besides other licensed brands. Titan Eye+ is the retail chain in the business of sales and service of prescription eye-wear, offering allied optical services like eye check-up, as well as products such as spectacle frames, and contact lenses.

Man Industries India surged 7.06% to Rs 199, on announcing an order worth Rs 1000 crore. The company bagged an order to manufacture and supply 257 miles of LSAW and HSAW line pipes coated externally and internally with anti-corrosive systems. With this new order, Man Industries order-book stands at Rs 2200 crore. The board of the company is scheduled to meet on 31 March 2007, to consider a scheme of demerger between the company and Man Aluminium.

Glenmark Pharma advanced 2.97% to Rs 310. A suit was filed in the US to block the Indian drug company from marketing a generic version of a cholesterol drug. Schering Corporation and MSP Singapore Company have together filed this suit against Glenmark Pharma to disallow it from marketing a copy-cat version of Ezetimibe.

Paradyne Infotech gained 5.40% to Rs 92.70, after the company said on Wednesday its board had approved the acquisition of US-based Links Group International in a $4.75 million all-cash deal. The US acquisition will be executed through Paradyne Infotech's wholly-owned subsidiary in the US, Dyne Techservices, the company informed. The funding would be through a mix of debt and internal accruals, Paradyne Infotech added. Links Group's annual revenue was above $7 million, while gross profit was above $1.4 million.

All Asian markets were trading with gains. European markets with the exception of Spain’s Madrid General, had also advanced. The Hang Seng Index gained 1.37%, while the Nikkei 225 Index rose 0.05%.

The Securities and Exchange Board of India (Sebi) decided to allow short selling by institutional investors only in such stocks which are also traded in the derivatives segment. A clarification was made by M Damodaran, Chairman, Sebi, at a press conference in Mumbai on Wednesday (28 March). At present, there are 159 stocks, whose derivatives are available.

Damodaran added that institutional investors will be allowed to sell short only in these 159 stocks. According to the Sebi chief, short selling by institutional investors cannot be expanded to other stocks as the decision was based on experience gained in the matter. Even the list of 159 stocks was not small, and more stocks could be covered in due course, Damodaran informed.

On the issue of IPO grading, Damodaran said the scope of grading wouldl be expanded gradually to other offerings by companies in the form of a rights issue and follow-on public offerings (FPOs). Later, companies will also be graded on the basis of previous issues made by them. However, with the introduction of grading, the merchant banker will not be shorn off his responsibility. Merchant bankers will continue to be responsible for all disclosures made in the prospectus and issue related processes.

On the issue of imposing the circuit filters on the first day of listing, Damodaran said, the Surveillance Committee comprising the representatives of the exchange and Sebi, was seized of the matter and some concrete decisions would be taken soon. However, on the issue of imposing ciruit filters on the day of re-listing of securities, Damodaran pointed to an already existing provision for imposing 20% circuit filter.

The trend in the global markets has been impacting domestic bourses in the past few weeks. Most Asian markets were in the green today, which may provide support to the domestic bourses. The Sensex’s 240-point fall on Wednesday (28 March 2007), was largely due to weakness in global markets. European and Asian stocks had slipped on Wednesday and the yen had risen against higher-yielding currencies as Iran worries prompted investors to ditch risky carry trade' positions based on cheap borrowing in the Japanese currency.

Fresh risk aversion was sparked by tensions over Iran. US crude jumped $5 to a six-month high of more than $68 a barrel late on Tuesday, on rumours of a military clash between Iran and the US navy. Oil prices relented on Wednesday, after Washington dismissed the talk, but stayed up by nearly $1 for the day.

US stocks fell on Wednesday, as escalating tensions with Iran sparked a fresh wave of risk-aversion. Investor unease grew further after Federal Reserve Chairman Ben Bernanke told the US Congress that economic uncertainties had increased and warned that inflation remained a concern.

The Dow Jones industrial average closed down 96.93 points, or 0.78%, at 12,300.36. The Standard & Poor's 500 Index closed down 11.38 points, or 0.80%, at 1,417.23. The Nasdaq Composite Index closed down 20.33, or 0.83%, at 2,417.10.

A report on US orders for big-ticket items such as computers and appliances on Wednesday failed to live up to forecasts, further underscoring weakness in the world's largest economy.

Oil prices dipped below $64 a barrel today amid heightened tension in the Middle East as Iran's detention of 15 British navy personnel approached the one-week mark. Iran, the world's fourth-largest oil producer, is located along the Strait of Hormuz, through which about two-fifths of the world's oil is transported. Traders worry that oil supplies could be disrupted if unrest were to escalate in that zone.

Light, sweet crude for May delivery fell 15 cents to $63.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract setttled at $64.08 a barrel on Wednesday, its highest closing since September 2006. May Brent crude on London's ICE Futures exchange fell 3 cents to $65.75 a barrel.

Oil spiked briefly above $68 a barrel in after-hours trading late Tuesday on rumours that Iran had fired on a US ship in the Persian Gulf, which was denied by the US military.

FIIs were net equity buyers to the tune of Rs 520 crore on 28 March 2007.

The next major trigger for the market is Q4 March 2007 results. Concern that the US economy is cooling faster than previously forecast, along with the recent surge of the rupee versus the dollar has ignited market talk that IT bellwether Infosys’ FY 2008 (year ending 31 March 2008) may turn out conservative. Infosys unveils its full year guidance at the time of announcing fourth quarter and annual results in April.