Sensex earns 80 points; realty scrips back in reckoning

The barometer Sensex settled with gains, as buying resumed in the late afternoon session, with IT, metals and select pivotals leading the charge. Real estate stocks rebounded after their severe pounding, which had eroded 25 - 50% value of such stocks.

The 30-share BSE Sensex settled 80.35 points (0.62%) higher, at 12,982.98. It had opened higher, at 12,924.50. The S&P CNX Nifty gained 35.95 points (0.96%), to finish the day at 3,770.65.

The Sensex remained highly volatile today. After opening firm, it crossed the psychologically important 13,000 level, which technical analysts feel is a strong barrier, registering an intra-day high of 13,026.85. However, it was not able to sustain the higher levels, and slumped to a low of 12,817.62. The benchmark Sensex again rebounded sharply, as buying resumed at the lower levels, or probably due to short-covering.

Till 19 March 2007, trading on the bourses will be halted for 45 minutes at 11:45 IST due to sun outage. Trading will then resume at 12:30 IST, and will continue up to 16:15 IST.

The total turnover on BSE amounted to Rs 4177.96 crore compared to Rs 3417 crore on 12 February 2007.

The market-breadth was strong on BSE. There were over two gainers, for every losing scrip. Against 1,737 shares advancing, 845 declined while 80 scrips remained unchanged. The BSE Small-Cap Index settled at 6,434.87, a gain of 117.2 points (1.86%).

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

FMCG major HLL was the top loser, down 2.68% to Rs 180.05, on a volume of 7.50 lakh shares. It had slipped to a low of Rs 179.80.

Bharti Airtel (down 1.14% to Rs 761), Infosys (down 0.67% to Rs 2101) and REL (down 1.82% to Rs 465.50) were the other losers.

Ranbaxy dropped 0.96% to Rs 320.70, after Pfizer, the world's biggest drugmaker, sued Ranbaxy to block a generic form of the cholesterol and blood pressure medicine Caduet. Ranbaxy seeks US FDA approval to sell a low-cost version of Caduet, which combines Pfizer's blood pressure drug Norvasc with the cholesterol treatment Lipitor, the world's best-selling medicine.

In a 9 March 2007 complaint filed in the federal court in Wilmington, Delaware, Pfizer said the copy would infringe patents that expire in 2010 and 2018. Meanwhile, Ranbaxy on Monday put in its bid to acquire Merck's generic-medicines division, in a step to access Europe, the world's second-largest pharma market.

Grasim was the top gainer, up 2.26% to Rs 2059.85, on a volume of 1.66 lakh shares.

Software stocks rose on renewed buying. Satyam Computers (up 1.67% to Rs 449.80), Wipro (up 1.47% to Rs 581.45) and TCS (up 2.10% to Rs 1264) edged ahead. The BSE IT Index gained 0.7%, to 5,036.51.

India's largest private steel manufacturer, Tata Steel, advanced 1.91% to Rs 444.50, on a volume of 9.63 lakh shares. Welspun Gujarat Stahl Rhoren (up 3.94%), JSW Steel (up 3.23%), Jindal Stainless (up 2.69%) and Ispat Industries (up 1.92%) advanced higher. The BSE Metal Index rose 1.07%, at 8,227.89.

Index heavyweight RIL was up 0.66% to Rs 1324.65. As many as 4.53 lakh shares changed hands in the counter on BSE. RIL said on Monday it had made two new gas discoveries off the eastern coast of India. While one strike has been made in the Krishna-Godavari basin, the second find is located in the Mahanadi basin, off the Andhra coast. “The commercial viability of the discoveries is now under evaluation. The recent discoveries demonstrate the further upside potential of the blocks in the Krishna-Godavari and Mahanadi basins,'' an RIL statement said.

Cement stocks rebounded from their lower levels, as buying resumed. ACC rose 0.45% to Rs 751, on a volume of 13.21 lakh shares. ACC rose as much as 19.2 % to Rs 890, in intra-day trading on NSE, in what seems to be a punching error. It moved in a wide range of Rs 805 and Rs 738.

Gujarat Ambuja Cements (up 0.71% to Rs 105.95) and Shree Cements (up 1.45% to Rs 975) also advanced.

Recently-listed MindTree Consulting spurted 11.72% to Rs 871.10, extending a sharp surge of Monday. The counter clocked huge volumes of 77.86 lakh shares on the BSE. The scrip had also surged to a high of Rs 914. Mindtree Consulting was the top-traded counter on BSE, grossing Rs 687.32 crore.

Real estate scrips surged, extending their recovery, following the decision by cement firms not to raise prices for a year. Cement companies have decided to raise prices for one year in the government’s efforts to combat inflation. This will ease pressure for real estate developers, with respect to rising input costs.

Parsvnath Developers surged 16% to Rs 283.50, on a volume of 28.44 lakh shares. Mahindra Gesco Developer (up 11.23% to Rs 656), Ansal Infrastructure (up 5% to Rs 533.70), Unitech (up 5% to Rs 384.10), Akruti Nirman (up 10% to Rs 448.20) and Sobha Developers (up 8.88% to Rs 787.15) surged as well.

Lanco Infratech, an infrastructure development company with interests in power, construction and property development surged 10% to Rs 194.30. Bombay Dyeing, with real estate development as a key trigger, spurted nearly 8% to Rs 577.45. Bombay Dyeing has huge real estate property in Mumbai, which it plans to develop. And that has been a key trigger for the stock in the past 1 year or so.

Real estate scrips had tumbled in the past few weeks, when property prices started cooling off as interest rates continued to head north. The fall continued early this month after the Budget proposed withdrawing tax breaks for construction contracts, fanning concerns the sector could slow demand.

Glenmark Pharmaceuticals rose 4.69% to Rs 601, after the company said on Monday it had entered into an agreement with US-based Dyax, to find therapeutic antibodies that can treat cancer and inflammatory diseases. The agreement, signed by Glenmark’s Swiss subsidiary, will fund Cambridge, Massachusetts-based Dyax’s efforts to identify biological entities for three targets provided by Glenmark Pharmaceuticals.

The deal between the two companies may be expanded later to include additional targets. Dyax will receive technology-licensing fees and payments for full-time employee from Glenmark to fund the research, in addition to milestone payments for clinical progress. The US company also will receive royalties on net sales that may result if Glenmark develops and commercialises the antibodies from Dyax.

Havell's India surged 6.33% to Rs 474, after it said that it would acquire SLI Sylvania lighting business for $300 million in an all-cash deal.

NIIT Technologies jumped 11.23% to Rs 442.20, due to bargain-hunting, after a recent steep fall. The NIIT scrip had tumbled on 28 February 2007, when the Union Budget 2007-08 proposed bringing employee stock options under the fringe benefit tax. The stock had tumbled 17.6% in a single trading session on that day, to Rs 397.15. It had bounced back the next day, gaining 15% on 1 March 2007 to Rs 456.85. However, the rebound was short-lived, and the stock had dipped to Rs 397.55 by 12 March 2007.

Tata Tea rose 2.64% to Rs 613, after it launched 'Tata Tea Life', a regular black tea with the addition of natural flavours of herbs and spices, known to impart health and wellness.

Aftek climbed 5% to Rs 67.35, after Morgan Stanley International acquired 580,414 shares in the company, raising its stake to 5.43% from 4.77%.

Sadbhav Engineering surged 3.18% to Rs 449.95, after securing a Rs 39 crore water canal project in Orissa.

Asian stock exchanges were trading mixed with a negative bias. The Nikkei average snapped a three-day winning streak on Tuesday, slipping 0.66% in quiet trade as exporters such as Sony Corp lost ground on continued concern about outlook for the US market. The Nikkei 225 Index fell 113.55 points, to 17,178.84, after gaining in three straight sessions.

The Hang Seng Index was down 75 points (0.4%), to 19,367, the Shanghai Composite was up 10 points (0.3%), at 2,965, the Straits Times in Singapore was down 36 points (1.1%), at 3,147, the Taiwan Weighted was up 55 points (0.7%), at 7,684 and the Seoul Composite had lost 5 points (0.4%), to 1,436.

Crude oil rose in New York on speculation that a government report will show a decline in US gasoline supplies, prompting refiners to increase processing to meet summer demand. Crude oil for April delivery rose as much as 44 cents, or 0.8%, to $59.35 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $59.33 in Singapore.

The contract fell $1.14, or 1.9%, to $58.91 on Monday, the lowest settlement price since 20 February 2007. Prices fell almost $3 a barrel in the past three sessions, as mild weather in the US Northeast contributed to a 5% decline in heating oil prices.

US stocks advanced on Monday, helped by deal news, cheaper oil and positive broker comments on the chip sector. The Dow Jones industrial average was up 42.30 points, or 0.34%, to end at 12,318.62. The Standard & Poor's 500 Index was up 3.75 points, or 0.27%, to finish at 1,406.60. The Nasdaq Composite Index was up 14.74 points, or 0.62%, to close at 2,402.29.

Earlier, a sell-off gripped the bourses in late February-early March 2007 due to a setback in global markets, and a disappointing Union Budget. A sharp fall of nearly 9% in Chinese stocks on 27 February 2007, had spooked the global bourses in this period.

The Union Budget left a lot to be desired. While there was no across-the-board cut in the 10% corporate surcharge as expected, the dividend distribution tax was raised to 15% from 12.5%. The Budget also raised direct/indirect taxes for cement, construction and IT sectors.

The next trigger for the domestic bourses may come from global bourses. The US Federal Reserve holds a two-day meeting on 20 - 21 March 2007, to decide US interest rates. The latest US jobs data helped ease expectations of a possible rate cut by the Federal Reserve.

Industrial output jumped 10.9% in January from a year earlier, powered by surging consumption across sectors. Economists said this means the Reserve Bank of India (RBI) can be expected to tighten monetary policy once again, in order to temper demand and tackle inflation, especially manufacturing inflation. Economists expect the RBI to hike repo and reverse repo rates by 25 basis points at its April monetary policy meeting, while maintaining the cash reserve ratio (CRR), because they have shifted to MSS (market stabilisation scheme) auctions to suck out liquidity now.

Industrial production in January was a little slack compared with December's 12.5% and November's 15.4%, but the cumulative growth for the fiscal stands at 11% against 8.5% in the year-ago period, a sign that the momentum is intact.

Latest data released on 13 March 2007, showed that 16 out of 17 industry groups registered output growth in January 2007. Manufacturing is leading the charge, but unlike last year mining and electricity, too, have started making significant contributions.

Manufacturing rose 11.6% in January against 9.4% a year ago, while mining rose three-fold at 6% from 2%. The electricity sector grew by 8.5% in January this year against 6.4% in the same month last year. But the real turnaround was in mining, where production was up 4.5% against just 0.6% during the first 10 months of the last financial year