Market wipes out early gains; ends 14 points ahead

The Sensex experienced a trend reversal during the day. The benchmark index, which after opening higher at 12,655.94, had surged to 12,789.81, eased as selling began in full-swing. Offloading continued till the barometer index touched a low of 12,510.75, a fluctuation of 279.06 points.

Volatility was the trademark of today's session, which experts opine the domestic market will suffer through March 2007. According to them, healthy corporate results in April should usher in some stability.

The 30-share BSE Sensex settled 14.23 points higher, at 12,543.85, while the S&P CNX Nifty rose 2.50 points, at 3,643.60.

In the past few days, the domestic bourses had slipped because of weakness in the global markets.

The market-breadth, a measure of the overall health of the market, was positive, yet not as strong as in the earlier part. Against 1,458 shares advancing, 1,112 declined. A total of 75 scrips remained unchanged. The BSE Small-Cap Index closed at 6,368.18, up 44 points (0.70%), while the BSE Mid-Cap Index ended at 5,280.79, up 34 points (0.66%).

The BSE cash turnover amounted to Rs 3826.13 crore while the NSE F&O turnover was Rs 26715.87 crore.

Among the 30-Sensex pack, 17 declined while the rest had advanced.

Pharma major Dr Reddy’s Labs was the top gainer, up 5.53% to Rs 682, as 1.23 lakh shares changed hands in the counter on BSE. The company has pulled out of the race to acquire the generic drugs unit of Merck. The German drugmaker recently said it may sell the generics division to focus on high-margin branded pharmaceuticals and chemicals, to help cut debt from its $13.3 billion Serono acquisition.

Merck's generics business is expected to cost at least 4 billion euros ($5.3 billion), according to people close to the sales process. Too big a size, the transaction too large and the timing not right are the various reasons Dr Reddy’s Labs has put forward for quitting the race.

Cigarette major ITC rose 3.40% to Rs 147.70, on high volumes of 20.65 lakh shares, after striking a high of Rs 150.85. The stock surged on reports that its food unit is likely to bid for Patak's, UK, which is valued at about 200 million pounds ($387 million). Patak's, a 50-year-old family-owned company, makes a range of ready-to-eat Indian foods, cooking sauces, snacks, spices and pickles, and is also a supplier to shops and restaurants worldwide.

ITC, which derives more than half its revenue from cigarettes, is keen to strengthen the portfolio in the food segment. The firm sells ready-to-eat food, confectionery, biscuits and snacks.

Reliance Industries (RIL) was down 0.61% to Rs 1277.20, on a volume of 11.45 lakh shares. The stock had eased from an intra-day high of Rs 1310. There are reports that it is looking at buying a stake in France's Carrefour, the second-largest retailer after Wal-Mart. This will catapult India's largest private sector group to the ranks of the world's top retailers. RIL was looking at the possibility of buying the 13% stake held by the Halley family, Carrefour's largest shareholder, although talks have not yet been initiated.

Reports that RIL had inched closer to signing a memorandum of understanding (MoU) with the $49 billion US-based Dow Chemicals, to set up a joint venture (JV) company for the latter to transfer assets from its commodity plastics and chemicals business to the JV, also spurred buying in the heavyweight counter.

Another report says RIL withdrew its bid to take over Super Bazar as the government does not amend laws. Super Bazaar, a cooperative market in the heart of central Delhi, was built 33 years ago with an area of more than one lakh square feet. Mukesh Ambani had offered Rs 288 crore to revive the store.

State-run GAIL (India) said it will jointly bid with RIL at the auction for oil and gas blocks, when India holds it next time. GAIL expected RIL to give it rights to transport gas from a block in Madhya Pradesh.

Software pivotals were in demand following a near 1% rise in the tech laden Nasdaq Composite Index on Wednesday. The BSE IT Index rose1.88%. It was the top gainer among the sectoral indices on BSE.

Infosys gained 3.32% to Rs 2086, Wipro rose 0.86% to Rs 560 and TCS gained 2.43% to Rs 1243.

Satyam Computer advanced 0.10% to Rs 433, on reports it was looking at acquiring a telecom or technology consulting firm in the United States or in Europe, for up to $50 million.

Top gainers among secondline IT shares were KPIT Cummins Infosystems (up 6.32% to Rs 134.60), Rolta (up 1.73% to Rs 352.20), Aztec Software (up 3.78% to Rs 115.35), Ramco Systems (up 3.7% to Rs 134), and Polaris Software (up 1.83% to Rs 169.50).

Larsen & Toubro (L&T) gained 0.08% to Rs 1487, after the company said on Thursday a consortium, including the firm, had secured a contract of Rs 1400 crore for the expansion of the Vizag Steel plant of Rashtriya Ispat Nigam. L&T's share of the project is around Rs 810 crore.

State Bank of India (SBI) was the top loser, down 3.15% to Rs 917.70, on a volume of 7.70 lakh shares. As per reports, SBI has paid an advance tax of Rs 690 crore as the fourth and last installment versus Rs 1036 crore paid in the fourth installment last year. The lower advance tax has raised concerns that its Q4 March 2007 financial performance may be uninspiring.

SBI, however, was not the only nationalised bank to weaken, the BSE Bankex itself declined 1.23%. Canara Bank (down 3.76%), Bank of India (down 3.43%), Bank of Baroda (down 1.88%) and Punjab National Bank (down 2.01%) also eased.

ACC (down 2.63% to Rs 727.90), HDFC (down 2.58% to Rs 1515) and Tata Motors (down 2.30% to Rs 728) followed SBI in that order.

Bhel slipped 1.03% to Rs 2009.20. There are reports that a consortium of Siemens and Bhel was awarded a contract by the Power Grid Corporation of India. The share of Siemens Power Transmission and Distribution is 170 million euro in the latest order received by the consortium. While Siemens will provide a new HVDC transmission system to transport energy generated from Barh power plant in Uttar Pradesh to New Delhi, with low loss from the pooling stations at Balia, Uttar Pradesh, to Bhiwadi, Rajasthan, Bhel will supply transformers and components of AC switchgears.

Maruti Udyog (MUL) rose 1.11% to Rs 800, after the company increased prices of cars across all models. MUL has announced a price hike across all models, and across all cities, which becomes effective from 15 March 2007 and ranges between Rs 258 and Rs 1017. The hike is in response to an increased cess announced in the Union Budget 2007-08.

Shares of metal producers advanced on renewed buying anticipating prices of their products to firm up further. The BSE Metal Index gained 1.34%. SAIL (up 2.48%), Hindustan Zinc (up 3.19%), Sterlite Industries (up 1.22%), Jindal Stainless (up 1.95%), Hindalco (up 1.21%), Tata Steel (up 0.65%) and Jindal Steel and Power (up 0.90%) had gained in this pack.

Suzlon Energy lost 2.74% to Rs 1016.95, after French nuclear reactor maker, Areva, raised its stake in German wind-turbine maker REpower, along with raising the offer price, to 140 euros a share, 11.1% higher than Suzlon’s 126 euro per share. The scrip of Suzlon Energy had touched a high of Rs 1088, during the day.

Suven Life Sciences surged 4.96% to Rs 152.35, after the company fixed 2 April 2007, as record date for the stock-split and a bonus issue. Suven Life Sciences’ members had on 10 March 2007 approved splitting each equity share of face value Rs 2 into two shares of Re 1 each. Members also approved a 1:1 bonus issue of shares at the same meeting.

MICO rose 0.34% to Rs 3260, after it posted a net profit of Rs 64.96 crore for the December 2006 quarter compared with Rs 63.13 crore in the December 2005 quarter. Total income has increased from Rs 871.27 crore to Rs 1056.78 crore. Bosch, the German auto components giant, will invest Rs 900 crore in its Indian subsidiaries over two years. A bulk of the investment will be in Motor Industries Company (MICO) -- the Bosch flagship in India.

Kirloskar Brothers surged 3.60% to Rs 390, after it received orders worth Rs 344 crore from the Andhra government for constructing pumping stations at Vasanthavada, Peddavagu Project, and Bandarugudem Tank. The job includes electro mechanical and hydro mechanical works as well as site development for the Indira Sagar Lift Irrigation Project (Polavaram).

All Asian markets were trading with gains. The Nikkei Average rose 1.10% on Thursday, led by exporters such as Canon Inc, as concerns about their earnings receded following a recovery in US stocks and the yen's retreat against the dollar. The Nikkei closed up 183.50 points, at 16,860.39. The broader TOPIX Index rose 1.15%, to 1,694.18.

The Hang Seng Index was up 132.51 points (0.70%), at 18,969.44.

US stocks posted modest gains on Wednesday, as worries eased about losses for firms operating in the subprime mortgage sector -- which lends to borrowers with a weaker credit history -- might spill over into the wider economy and slow growth. The Dow Jones Industrial Average gained 57.44 points (0.48%), to settle at 12,133.40. The Nasdaq Composite Index advanced 21.17 points (0.9%), to 2,371.74.

The Sensex had plunged 453.36 points (3.4%) on Wednesday (14 March 2007) as part of a global crash brought about by deepening US mortgage-lending crisis. Key Asian share indices had dived 2 - 3% on Wednesday.

Oil prices edged above $58 on Thursday, after a drop in US gasoline inventories raised concerns over supplies ahead of the summer driving season and with OPEC expected to maintain supply curbs.

FIIs were net sellers to the tune of Rs 861.40 crore on 14 March 2007.

US crude stood 15 cents up, at $58.31 a barrel, while London April Brent crude, due to expire on Thursday, was up 8 cents at $61.14.

Gains were limited as the market remained cautious ahead of an OPEC meeting on Thursday, to decide production policy and as heavy maintenance shutdowns at US refiners kept US crude prices below London's Brent crude, an unusual discount between the two international benchmarks.

Trading on the bourses was halted at 11:45 IST for sun outage. The trading time has been extended by 45 minutes till 16:15 IST. This schedule is applicable till 19 March 2007.