Market drifts lower in volatile trade

There was a trend reversal in the market which were trading firm till mid-afternoon trade, as selling emerged at higher level. The late fall in domestic bourses was in contrast to the firmness in global equities. Shares from metal and IT sectors dragged the market lower, while buying was seen in capital goods and consumer durables stocks. State Bank of India (SBI), Reliance Industries (RIL) and NTPC were the key losers, which were responsible for the fall today.

The 30-share BSE Sensex lost 41.01 points or 0.29% at 14,162.71. It had opened on a firm note at 14,277.61 and advanced to a high of 14,326.55 shortly, tracking strong global markets. The index slipped to a low of 14,112.53 at the fag end of the trading session.

However, the S&P CNX Nifty ended slightly higher. It rose 1.45 points or 0.03% at 4171.45. The Nifty June 2007 futures were at 4,129, a sharp discount of 42.45 points over spot closing of 4,171.45

The market lost ground even as the latest data showed that the growth in inflation was the lowest since end-July last year when it stood at 4.72%. The wholesale price index rose 4.80% in the 12 months to 2 June 2007, lower than the previous week's increase of 4.85%, due to a decline in food and energy prices, government data showed.

Asian and European markets edged higher today, 15 June 2007. Hang Seng (up 0.72% to 21,217.05), Nikkei 225 (up 0.72% to 17,971.49), Straits Times (up 0.22% to 3,581.16), Shanghai Composite (up 0.43% to 4,132.69) and Taiwan Weighted (up 1.45% to 8,573.64) moved higher.

European markets were also trading higher. FTSE 100 (up 0.55% to 6,686.20), MIBTel (up 0.32% to 33,359) and CAC 40 (up 0.38% to 6,069.91) edged higher. The US treasury market continued to show signs of stabilising, helping Asian and European equities extend their gains. Rising US bond yields had weighed on global markets earlier this week.

The total turnover on BSE amounted to Rs 4207.60 crore and turnover on NSE's futures & options segment totaled Rs 31204.39 crore.

The BSE Mid-Cap index rose 19 points or 0.31% to 6,180.92 while the BSE Small-Cap Index ended 29 points or 0.40% higher at 7,350.25.

The market breadth, indicating the overall health of the market, was positive on BSE as buying continued for small-cap and mid-cap stocks for the second straight day. However it was not as strong as it was in morning session: 1,302 shares advanced as compared with 1273 that declined, while 93 remained unchanged.

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

State-run engineering major Bhel jumped 2.65% to Rs 1385 on 1.44 lakh shares, and was the top gainer among Sensex constituents. On Wednesday, 13 June 2007, Bhel bagged a Rs 430-crore order from Indian Oil Corporation (IOC) to supply steam generators for IOC's Vadodara project.

L&T (up 0.82% to Rs 1938.80), Suzlon Energy (up % to Rs ), BEML (up % to Rs ), and Bharat Bijlee (up % to Rs ) advanced from the capital goods pack. As the result, the BSE Capital Goods Index rose 1.68% at 11,156.78, and was the top gainer among sectoral indices on BSE.

State Bank of India (SBI) lost 0.40% to Rs 1,308.80. It had surged to a high of Rs 1348.50 in intra-day trade. The government is all set to acquire Reserve Bank of India's (RBI) stake in State Bank of India, with the union cabinet today, 15 June 2007, approving passing of an ordinance to the effect. The ordinance route was taken as the State Bank of India (SBI) Amendment Bill, which allows the government to take control of the RBI's 59.7% stake in SBI is still pending in Parliament.

Banking shares were mixed today, after inflation data. The BSE Bankex was up 0.6% at 7,461.59. Union Bank (up 4.70% to Rs 120.20), UTI Bank (up 1.97% to Rs 597.25), Kotak Mahindra Bank (up 1.03% to Rs 566) gained while Bank of India (down 0.89% to Rs 189.60), Canara Bank (down 1.04% to Rs 238.60), drifted lower.

Ranbaxy laboratories (up 0.80% to Rs 373) and Maruti Udyog (up 1.62% to Rs 740) edged higher

Housing finance major HDFC declined 2.86% to Rs 1773, on 85,865 shares.

NTPC slipped 1.80% to Rs 150.70, on 17.47 lakh shares. As per reports, NTPC, the country's largest power generator, is planning a follow-on public offer to raise funds for expansion.

Metal shares saw profit booking. The BSE Metal Index lost 0.7% to 9,896.84. Tata Steel (down 2.69% to Rs 597.65), Jindal Stainless (down 2.52% to Rs 145) and Sesa Goa (down 0.80% to Rs 1748), declined.

Hindalco Industries slipped 1.86% to Rs 161. Credit rating agency CRISIL, on Thursday, 14 June 2007, downgraded its rating on Hindalco by one notch from triple-A to double-A. Crisil had placed under rating watch with negative implications, following a large debt raised by the company to funds its acquisition of Novelis.

Oil & Natural Gas Corporation rose 0.12% to Rs 881, after the Union cabinet approved the state-run explorer's plan to buy a 33% stake in an Egyptian deep-water block from operator Royal Dutch Shell. The Egypt block has estimated gas reserves of around 14 trillion cubic feet (tcf).

ICICI Bank rose 0.47% to Rs 910 after the country’s largest private sector bank said on Thursday, 14 June 2007, it is raising up to Rs 20,000 crore ($4.9 billion) through a follow on public offer in India and US. The funds mobilised through these offerings will be used to expand its international and rural operations, and meet the growing demand for loans.

This issue will open on Tuesday, 19 June 2007 in both the countries and will remain open for a period of four days. The price band will be announced on 17 June 2007. The bank would issue equity shares worth Rs 8,750 crore in the domestic market. A similar amount would be raised through American Depository Shares (ADS) listed on the New York Stock Exchange, where the bank is already listed. The fund raising also includes a green shoe option of Rs 2,625 crore.

Index heavyweight Reliance Industries (RIL) lost 1.54% to Rs 1,670, on 7.57 lakh shares. It eased from high of Rs 1710. RIL will firm up a gas-pricing formula for its Krishna Godavari (KG) basin by July 2007. It also plans to produce crude oil from the KG block in 2008. The production will initially start at 30,000-40,000 barrels per day and peak at about 50,000 bpd.

IT stocks edged lower. The BSE IT Index lost 0.75% at 5,062.86, and was the top loser among the sectoral indices on BSE. Infosys (down 1% to Rs 2000.10), Wipro (down 0.40% to Rs 530), TCS (down 1.89% to Rs 1181) and Satyam Computers (down 2.01% to Rs 480.75) declined.

The rupee today slipped against the US currency and was quoted near 41-level in late morning deals due to fairly good import coverings amid slowdown in FII inflows into equity markets.

Hindustan Dorr-Oliver jumped 5% to Rs 87.25 on bagging a Rs 85-crore order from Indian Oil Corporation for the recycling plant of IOC for its Haldia refinery, which is the biggest recycling plant using reverse osmosis technology in any refinery in India. The project is to be commissioned within 18 months.

SpiceJet rose 0.53% to Rs 57.80 on reports Jet Airways is eyeing the stake of the Kansagra family promoted Royal Holding Services and Gulf based investment house Istithmar PJSC, which hold around 13% each in SpiceJet. Reports also said the commonality of fleet and easy integration with Air Sahara are the key reasons behind Jet looking at SpiceJet.

Astra Microwave Products rose 1.21% to Rs 145.80 after a block deal was struck for 3.51 lakh shares at Rs 145 each in opening trade on BSE, constituting 0.65% of the equity capital of the company.

Venus Remedies moved up 2.43% to Rs 474 on successfully filing for patent in 48 countries around the globe for its research product.

Ruchi Soya Industries lost 1.80% to Rs 384. It announced 5-for-1 stock split during market hours today, 15 June 2007.

Indiabulls Real Estate jumped 3.29% to Rs 370.05 on joining hands with Zublin International for large infrastructure projects. They have also agreed to set up a special purpose vehicle (SPV) to execute these projects.

Hind Rectifiers plunged 10% to Rs 911.50 as weak Q4 results overshadowed an announcement of 5-for-1 stock split by the company. Hind Rectifiers' net profit dipped 13.6% to Rs 3.11 crore in Q4 March 2007 compared with Rs 3.60 crore in Q4 March 2006. Sales jumped 27.1% to Rs 27.08 crore in Q4 March 2007 (Rs 21.30 crore). Net profit scaled up 27.6% to Rs 11.23 crore in the year ended March 2007 as against Rs 8.80 crore in FY 2006. Sales moved up 23.3% to Rs 87.32 crore in FY 2007 (Rs 70.80 crore).

Ashapura Minechem gained 1.11% to Rs 337 the company announced during market hours today, 15 June 2007, that its board would consider bonus issue in a board meeting on 27 June 2007.

Elecon Engineering Company gained 2.90% to Rs 509 on declaring a liberal 2:1 bonus issue. The scrip touched a high of Rs 527.85 and a low of Rs 490.10 during the day. Besides the bonus issue, the board of Elecon Engineering Company also recommended during trading hours today, 15 June 2007, 75% dividend.

The Bank of Japan (BoJ) left its assessment of the economy unchanged in a monthly report on Friday, 15 June 2007. The central bank's Policy Board also kept interest rates unchanged at 0.5% at a meeting that ended on Friday, 15 June 2007. The central bank maintained its outlook that the economy will continue expanding moderately.

Wall Street surged again yesterday, 14 June 2007, launching the Dow Jones industrial average to its best two-day advance since last July after data showed that wholesale inflation, excluding energy and food costs, is rising at a gentle pace. The Dow Jones rose 71.37 points, or 0.53%, to 13,553.72. Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 7.30 points, or 0.48%, to 1,522.97, and the Nasdaq composite index climbed 17.10 points, or 0.66%, to 2,599.41.

Crude oil traded near a nine-month high in New York after a drop in US refining raised concern that fuel supplies may remain below average. Crude oil for July delivery was at $67.64 a barrel, down 3 cents in electronic trading on the New York Mercantile Exchange.