Market settles with losses for third straight day

The mood on the street was cautious with the market finishing with losses for the third straight trading session today. From 14,535.01 on 5 June 2006, the Sensex has declined 471.20 points in 3 trading sessions.

Fresh selling at higher levels, coupled with weak global markets and fears of CRR hike, dragged the market lower today. However some support emerged at lower level, at the fag end of the trading session in the form of value buying. Selling pressure was seen across the sectors with IT being an exception.

The 30-share BSE Sensex lost 122.37 points or 0.86% at 14,063.81. It opened lower at 14,063.94 and slumped to a low of 14,010.61 shortly, tracking weak global markets, before bouncing back. It also galloped to a high of 14,229.22, in mid-afternoon session, as buying intensified led by IT stocks.

The market was marred with intense volatility throughout the day’s trading session. The Sensex oscillated almost 220 points for the day. Going forward, Sensex has strong support at psychologically important 14000 level.

The S&P CNX Nifty lost 34.50 points or 0.83% at 4,145. Nifty June 2007 futures were at 4,124, a discount of 21 points over spot Nifty closing of 4,145.

The total turnover on BSE amounted to Rs 4599 crore and NSE F&O clocked a turnover of Rs 41,842.93 crore.

The market breadth though it remained negative, improved from the opening session. 1309 shares declined on BSE as compared to 1188 that advanced. 90 remained unchanged.

The BSE Small-Cap Index slipped 48 points or 0.7% to 7,342.59 while the BSE Mid-Cap Index settled 32 points or 0.51% lower at 6,156.22.

Among the Sensex pack, 25 declined while the rest advanced.

Aluminium and copper major Hindalco Industries advanced for the third straight day, and was up 3.30% to Rs 158.20, on 30.75 lakh shares. It was the top gainer from the Sensex pack. The market has been rife with speculation, this week that Alcan may team up with Sterlite Industries to bid for Hindalco.

Shares from the IT sector surged as rupee weakened. The BSE IT index vaulted 0.59% to 4,986.81, and was the top gainer among the sectoral indices on BSE. Satyam Computers (up 3.09% to Rs 496), TCS (up 1.30% to Rs 1222), and Wipro (up 0.20% to Rs 546.50), gained.

The Indian rupee extended its losses past 41 per dollar on Friday, 8 June 2007, to its lowest in nearly four weeks. In early afternoon trade, the partially convertible rupee was at 41.01/02, its lowest level since May 14. It had closed at 40.7350/7450 on Thursday, 7 June 2007.

IT stock have not performed in the market's recent surge due to the strong rupee. A rise in the rupee directly impacts revenue and profit of IT firms, which derive a lion’s share of revenue from exports to the US.

Oil & Natural Gas Corporation (ONGC) advanced 2.38% to Rs 875, after the state-run explorer announced five new finds of oil and gas at its blocks in the east coast and the north east of the country and said it would invest Rs 1285 crore ($316 million) to develop gas fields in western India. The announcement was made after trading hours on Thursday, 7 June 2007.

Cement major ACC slumped 5.10% to Rs 763 on 2.42 lakh shares, and was the top loser from the Sensex pack.

Tata Steel lost 5.07% to Rs 583.70 on 7.58 lakh shares. The stock was weak throughout the day. Led by Tata Steel, the BSE Metal Index declined 1.8% to 10,242.72.

HDFC declined 3.85% to Rs 1750. On National Stock Exchange (NSE), a block deal of 32,576 shares was executed at Rs 1800 per share.

Auto counters witnessed renewed selling on concerns of margin pressure and slowdown in demand. The BSE Auto Index closed lower by 2.3% at 4,700.71. Bike maker Hero Honda slumped 2.93% to Rs 677. Bajaj Auto shed 1.77% to Rs 2117. As per reports, bike sales have hit the slow lane, forcing bike makers to rationalise production and reduce dealer inventories.

Tata Motors slipped 3.14% to Rs 656 after 2.10 lakh shares changed hands in the stock in a single block deal on NSE at Rs 665 each. As per reports, the company has cut the production of passenger cars to the tune of 20% at its Pune plant. Reports also suggest that the launch of its new Indica, may be delayed to make adjustments for a drop in sales.

Car major Maruti Udyog edged lower by 3.77% to Rs 732, after 5 lakh shares changed hands in the stock in single block deal on BSE at Rs 740 each.

Index heavyweight Reliance Industries (RIL) declined 0.47% to Rs 1660.10, on 11.17 lakh shares. It recovered from low of Rs 1640. The final countdown has begun and gas from Reliance's KG basin blocks will start gushing out in one year's time. The internal calculations about gas pricing are also complete and reports indicate that RIL is targeting first week of July for the bids to start coming in. The base price for KG gas is likely to be $4.6-4.75/mmbtu.

Among the heavyweights, State Bank of India (SBI) was down 0.47% to Rs 1354. SBI, the country’s largest lender, raised about Rs 2,500 crore capital through upper tier- II bonds to support the business growth and meet the Basel II capital adequacy norms. This is the largest capital raising ever through upper tier II bonds in domestic market.

BSE's banking sector index Bankex was down 1% at 7,441.25, on fears of CRR hike. ICICI Bank (down 0.32% to Rs 906), Oriental Bank of Commerce (down 5.80% to Rs 211.25), Federal Bank (down 2.50% to Rs 273), Kotak Mahindra (down 2.21% to Rs 569.20), and HDFC Bank (down 2.04% to Rs 1087), edged lower.

Utility vehicle maker, Mahindra & Mahindra was down 2.71% to Rs 720. The company is reportedly in talks to buy an Italian gearbox company for $86-$98 million.

Biocon rose 0.31% to Rs 441 on entering into a memorandum of understanding with Deakin University, Australia, in the area of research & development.

Atlas Copco India slumped 4.90% to Rs 1090, after galloping 44% in a month’s duration, on market rumors of buyback offer at a higher price. However, the company today denied such rumors.

Educomp Solutions fell 1.27%% to Rs 1803 after the software training firm said it signed an agreement to acquire Singapore-based Ask n Learn Inc. for Singapore dollar 7.03 million.

Patni Computer Systems dropped 1.47% to Rs 553. There are media reports that General Atlantic Partners may acquire part of founders' stake. Gajendra and Ashok Patni, two of the three brothers who founded the software services firm, are looking to sell approximately around 28% stake in the firm. General Atlantic owns about 16% of the New York-listed Patni.

Gujarat State Petronet jumped 8.53% to Rs 58.50, as buying continued today, a day after announcement of good quarterly results on 7 June 2007. Gujarat State Petronet (GSPL)'s net profit rose 78.52% to Rs 19.28 crore in Q4 March 2007 from Rs 10.80 crore in Q4 March 2006. Sales rose 23.20% to Rs 83.12 crore in Q4 March 2007 as against Rs 67.47 crore in Q4 March 2006.

The net profit rose 91.45% to Rs 89.37 crore in the year ended March 2007(FY 2007) as against Rs 46.68 crore in FY 2006. Sales rose 20.53% to Rs 317.56 crore in FY 2007 as against Rs 263.47 crore in FY 2006.

Dena Bank surged 7.09% to Rs 47.60, on value buying. It is known to be improving its core operations with an improved loan book in current fiscal.

Optical storage media maker Moser Baer India flared up 5.43% to Rs 454.30. On Thursday, 7 June 2007, the optical storage media maker said its unit, Moser Baer Photo Voltaic, has orders worth more than $100 million. The unit has started commercial shipment of its solar photovoltaic cells.

BASF India added 4.51% to Rs 269.80. During trading hours on Wednesday, 6 June 2007, BASF India reported 26.31% fall in net profit to Rs 3.67 crore in Q4 March 2007 from Rs 4.98 crore in Q4 March 2006. Sales moved up 10.68% to Rs 160.70 crore (Rs 145.19 crore).

Entertainment Network India rose 0.81% to Rs 390 on signing a memorandum of understanding (MoU) with Shri Puran Multimedia (SPMT). SPMT holds valid and subsisting license from the Government of India to broadcast F.M. Radio in eight locations across India. As per the MoU, SPML has agreed to solely and exclusively utilize the sales support function offered by ENIL on a national level to facilitate the sale of airtime of radio stations of SPML.

SKF India plunged 15.40% to Rs on 398 on announcement by parent SKF Group that it will make an investment of Rs 270 crore to build a greenfield factory in India for manufacturing large size bearings. The factory is expected to start production in 2008. The investment in the new facility will be carried out through SKF's existing 100% subsidiary in India - SKF Technologies India. SKF Group holds 53.58% stake in SKF India.

Max India rose 2.42% to Rs 252.30 after 15 lakh shares changed hands in a two block deal on BSE and NSE at Rs 248 each. Two block deals took place in early trade. The first block deal struck on BSE where 7.50 lakh shares changed hands in the counter at Rs 248 per share. Second deal of 7.50 lakh shares was struck on NSE at Rs 248 each.

India's wholesale price index rose 4.85% in the 12 months to 26 May 2007, lower than the previous week's 5.06%, government data released today afternoon showed.

All the Asian indices and European indices were down sharply today, 8 June 2007, with China as an exception. The Shanghai Composite index was up 0.57% to 3,913.13.

Japan's Nikkei Average plunged as blue chips Sony Corp. and Mazda Motors declined after US and European stocks on Thursday, 7 June 2007, traded lower on concerns over rising global interest rates and surging bond yields in the US.

The Nikkei was down 1.52%. Hong Kong's Hang Seng (down 1.40%), Taiwan's Taiwan Weighted (down 0.65%), Singapore's Straits Times (down 1.54%) and South Korea's Seoul Composite (down 1.47%), all edged lower.

Wall Street fell sharply for a third straight session yesterday, 7 June 2007, after rising bond yields deflated hopes for an interest rate cut later in the year. The Dow Jones slumped 198.94 points, or 1.48%, to 13,266.73, bringing its three-day loss to about 410 points. It was the biggest three-session decline since stock markets began a short-lived pullback on 27 February, 2007. All 30 stocks in the blue chip average lost ground Thursday.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 26.66 points, or 1.76%, to 1,490.72, and the Nasdaq Composite index slipped 45.80 points, or 1.77%, to 2,541.38.

Oil slipped back under $71 on Friday, as Gulf producer Oman carried out tests to see if it could reopen its export terminal after a three-day closure due to a storm. London Brent crude was down 53 cents at $70.69 a barrel