Market snaps four-day losing streak

The market snapped its four days of declining trend, posting modest gains, in highly volatile trade today, 11 June 2007.

Prior to today’s rise, the BSe 30-share Sensex had slipped from 14,570.75 on 1 June to 14,063.81 on 8 June 2007, declining 507 points in four trading sessions.

The markets traded with a strong upward bias till mid-afternoon trade, but succumbed to selling pressure in late trading today.

The Sensex ended up 19.60 points to 14,083.41. It opened higher at 14,170.81 and surged to a high of 14,268.91, tracking firm global markets. However, it was not able to sustain the higher level and slipped to a low of 14,057.63 at the fag end of the trading session as heavy selling emerged.

The Sensex has strong support at 14,000 level.

The S&P CNX Nifty rose marginally by 0.60 points to 4,145.60

Volume was muted today, indicating that action might have shifted to the primary markets. The total turnover on BSE amounted to Rs 3484 crore.

As per reports, the institutional portion of property developer DLF's Rs 9625 crore (at the upper end of Rs 500 to Rs 550 price band) initial public offering (IPO) was fully subscribed within an hour of its opening on Monday, 11 June 2007. The IPO would constitute 10.27% of the fully diluted post-issue capital of the company.

The market breadth, which indicates the overall health of the market, turned negative on BSE after staying positive throughout the earlier part of the day as selling emerged for small and mid-cap shares later in the day. On BSE, 1,411 shares declined as compared to 1,169 that advanced, while 85 remained unchanged. In the morning session, the market breadth was much stronger with over 3 shares gaining for every loser.

As per provisional data, FIIs were net sellers to the tune of Rs 26.12 crore in equities today, 11 June 2007. Domestic institutions were net buyers to the tune of Rs 237 crore in equities today.

The BSE Mid-Cap index was down 0.43% to 6,129.48, while the BSE Small-Cap index lost 0.3% to 7,320.01

Among the Sensex pack, 16 declined while the rest advanced.

Bike maker Hero Honda jumped 3.24% to Rs 702.90 on 45,355 shares, and was the top gainer among Sensex pack. The stock along with other stocks from the auto pack had been languishing in the past few sessions on concerns of slowdown in sales.

Aluminium and copper major Hindalco Industries advanced for the fourth straight day, and was up 3.11% to Rs 162.60, on 25.22 lakh shares. The market has been rife with speculation since last week that Alcan may team up with Sterlite Industries to bid for Hindalco.

HDFC (up 1.66% to Rs 1779) and NTPC (up 0.94% to Rs 155.40) logged smart gains.

Shares from the FMCG space attracted fresh buying. The BSE FMCG Index gained 0.62% to 1,790.19, and was the top gainer among the sectoral indices on BSE. ITC (up 2.32% to Rs 154.20) and Godrej Consumer (up 3.79% to Rs 135.50), Nestle (up 1.36% to Rs 1155), and Marico (up 0.30% to Rs 56) edged higher.

IT stocks eased from their highs on profit booking. The BSE IT Index gained 0.6% at 5,015.10. Wipro (down 0.95% to Rs 542.50), Satyam Computers (down 0.46% to Rs 493) and TCS (down 0.27% to Rs 1217.50) edged lower after gaining smartly in the earlier part of the day. Infosys ended firm though. It gained 1.84% to Rs 1987.

The Indian rupee climbed on Monday, 11 June 2007, buoyed by large capital inflows slated for local equities and IPOs. In early trade, the rupee was quoted at 40.9850/9950 per dollar, up from 41.1150/1250 on Friday, 8 June 2007, when it had hit an intra-day low of 41.25 -- its lowest since 11 May 2007.

Index heavyweight Reliance Industries (RIL) advanced 0.60% to Rs 1670.10, on 6.80 lakh shares. The stock shrugged off reports that the selective bidding process adopted by RIL to arrive at a market determined price of $4.79 per million metricbtu (mmbtu) for the sale of natural gas from its D6 block in KG basin has drawn sharp criticism from major user ministries: power and fertilizers.

Among other heavyweights, State Bank of India (SBI) lost 1.23% to Rs 1340.10, while Oil & Natural Gas Corporation (ONGC) was down 0.32% to Rs 862.

ICICI Bank declined 0.40% to Rs 900. As per reports, ICICI Bank's follow-on public issue in the range of Rs 10000-Rs 11000 crore, is likely to open in the third week of June 2007. The bank may receive Sebi's approval for its issue by the end of this week. It may be recalled that ICICI Bank had announced in late April 2007 that it plans to raise Rs 20000 crore of equity from domestic and overseas issue.

Grasim lost 2.39% to Rs 2335 on thin volumes of 17,113 shares, and was the top loser among the Sensex constituents.

Reliance Communications dipped 2.14% to Rs 505.15, while Reliance Energy slipped 0.93% to Rs 516.

Shares of real estate developers were in demand, buoyed by good response for DLF public issue. Unitech (up 0.41% to Rs 507.15), Ansal Infrastructures (up 2.63% to Rs 298.75), Akruti Nirman (up 1.91% to Rs 362) and Orbit Corporation (up 2.69% to Rs 237) posted gains.

GAIL (India) vaulted 5.47% to Rs 309.65 on reports that the state-run company is preparing to team up with mid-sized firms from Canada, the US, the UK and Australia to jointly bid for blocks proposed to be offered under the new exploration and licensing policy (NELP). The government is planning to offer 70 blocks, covering around three lakh square kilometres in the seventh round of NELP in August 2007.

Mastek flared up 4.69% to Rs 295.65 after it earmarked $45 million for acquisitions in the software space.

Hindustan Petroleum Corporation (HPCL) advanced 4.21% to Rs 273.75. It is said to be in talks with Total from France and Kuwait Petroleum to build a new $3 billion refinery in India instead of the planned expansion at its Vizag refinery.

Cinemax slipped 0.80% to Rs 156.95 after the company’s net profit fell 18.95% in the year ended March 2007 to Rs 7.27 crore compared with Rs 8.97 crore in FY 2006. Revenue jumped 62.84% to Rs 68.98 crore, from Rs 42.36 crore.

Carborundum Universal settled with marginal loss of 0.03% to Rs 155 after the abrasives maker agreed to acquire 84.14% of Russia's Volzhsky Abrasives Works. Carborundum Universal (CUMI) has entered into a memorandum of understanding to pick up 84.14% stake in Russia-based Volzhsky Abrasives Works. The deal is subject to necessary clearances, which are expected by July 2007. Volzhsky Abrasives Works (VAW) is the largest producer of silicon carbide abrasives in Russia, with an installed capacity of 65,000 tonnes a year. VAW also produces bonded abrasives and refractories. VAW’s sales in 2006 were about $54 million.

Elecon Engineering Company gained 2.70% to Rs 467.50 on reports of bagging a Rs 12.18-crore order to supply materialhandling equipment to JSW Steel. The report of the order-win hit the market during trading hours today, 11 June 2007.

Ansal Housing & Construction slumped 5% to Rs 221.40 despite bagging license for development of a residential project at Rewari in Haryana. The integrated township is strategically located close to Delhi - Jaipur highway.

Kalindee Rail Nirman (Engineers) fell 3.66% to Rs 216 on profit booking after spurting following the company bagging a contract worth Rs 90.95 crore from Delhi Metro for track-related work on 6 June 2007. The company will begin work for the second phase of the metro project in a month.

Bombay Dyeing & Manufacturing Company slipped 0.84% to Rs 554.50. There are reports that the company has appointed Australian architect Ross Bonthorne to draft a plan for its mill land in Mumbai that will be developed into residences, hotels, malls and office complexes. Bonthorne is associated with one of Europe’s largest shopping centres—Bluewater in Kent, the UK.

Glenmark Pharmaceuticals rose 1.23% to Rs 684 after the drug maker said on Monday, 11 June 2007, its board approved splitting each of its shares into two. The current face value of Glenmark shares is Rs 2. As per reports, Glenmark Pharma is in discussion with potential European partners for its asthma molecule Oglemilast, and with several global companies for two research molecules targeted at neuropathic pain, osteoarthritis, inflammatory and dental pain.

Tata Chemicals edged up 0.25% to Rs 240 on reports that it may divest part or all of its investments in other Tata group companies to part finance its medium-term expansion plans. The company’s investment in the equity of other firms promoted by the Tata group is estimated to be worth over Rs 1200 crore at current market prices.

Gujarat NRE Coke advanced 2.32% to Rs 59.50 after signing an agreement with first class Scandinavian owners to jointly buy two ships of 60,000 deadweight tonnes (dwt) each an a time-charter basis. The ships will be delivered from Japanese yards in 2011 and 2012 for ten year charters.

Welspun Gujarat Stahl Rohren jumped 2.58% to Rs 183.20 on bagging Rs 1,166-crore pipeline orders for the supply of line pipes overseas. The new orders have taken the company's pending order book position to approximately Rs 5,166 crore.

Most of Asian and European indices settled with gains. Japan's Nikkei 225 Average rose as investors bought Toyota Motor, Matsushita Electric Industrial and other blue chips after data showed the economy grew at a faster pace in the first quarter than originally thought. The Nikkei was up 0.31%, Hong Kong's Hang Seng gained 0.52%. Taiwan's Taiwan Weighted (up 0.46%), and Singapore's Straits Times (up 1.54%) also gained.

China’s Shanghai Composite advanced 2.11% to 3,995.68

On Friday, 8 June 2007, the Dow Jones industrial average showed its biggest point gain in more than two months, and the Standard & Poor's 500 index crossed the 1,500 mark. Dow surged 157.66 points, or 1.19%, to 13,424.39. The S&P 500 advanced 16.95 points, or 1.14%, to 1,507.67. It was just last month that the index crossed above the 1,500 mark for the first time in nearly seven years. The Nasdaq composite index gained 32.16 points, or 1.27%, to 2,573.54.

Over the next few days, the progress of the July-September monsoon will hold key. The weather office said in April 2007 that this year’s monsoon was likely to be 95% of the long-term average, with a 5% margin of error. The annual monsoon is vital for India’s economic health as it is the main source of water for agriculture, which generates more than a fifth of the gross domestic product.

Oil prices rose today, 11 June 2007, after Iran's oil minister said OPEC has no plans to release more oil into the market ahead of its next policy meeting in September 2007. Light, sweet crude for July 2007 delivery gained 43 cents to $65.19 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Brent crude for July delivery rose 22 cents to $68.82 a barrel on the ICE Futures exchange in London.