Sensex sheds 70 points in choppy trade

The benchmark index, BSE Sensex saw high degree of volatility today, swinging sharply between positive and negative territory. Weakness stemmed on the bourses in late trading ahead of the Bank of England (BOE)'s meeting today on interest rate. Selling pressure was seen in auto, banking and FMCG stocks while shares from IT sector saw buying as the rupee stabilised against the dollar.

The 30-share BSE Sensex was down 69.75 points or 0.49% at 14,186.18. It opened lower at 14,195.84, tracking weak global markets. It recovered later to strike a high of 14,360.82 in morning trade. However it again declined and slipped to touch a low of 14,139.09 in afternoon trade. It recovered from lower level later, before sliding again in late trade.

The S&P CNX Nifty was down 18.75 points or 0.45% at 4,179.5. The Nifty June 2007 futures were at 4,164, a discount of 15.50 points over spot price

There are concerns that investors may pull out funds from the secondary market to invest in IPOs, which are scheduled to hit the market in the near term. Reality major DLF is mopping up between Rs 8,750 crore and Rs 9,625 crore at the proposed price band of Rs 500 - Rs 550 per share. DLF IPO opens for subscription on 11 June 2007 and ends on 14 June 2007.

ICICI Bank had, on 15 May 2007, filed a draft prospectus with Sebi to seek approval for raising Rs 17,500 crore through an equity issue in the domestic and overseas market.

The total turnover on BSE amounted to Rs 4272.41 crore while the NSE futures & options (F&O) turnover was at Rs 42,284.84 crore today, 7 June 2007.

The market breadth was negative with 1436 shares declining on BSE as compared to 1123 that advanced. 76 remained unchanged.

The BSE Small-Cap Index was up 0.02% to 7,391.02 while the BSE Mid-Cap Index rose 0.10% to 6,187.97

Among the Sensex pack, 21 declined while the rest advanced.

IT pivotals posted gains, as buying continued. The Indian rupee hovered near one-week low on Thursday, 7 June 2007, as investors unwound short positions in the dollar on concerns that local stocks would extend losses and spark a wave of capital outflows.

Four of the top six gainers in Sensex were from the IT sector. TCS (up 0.82% to Rs 1209), Satyam Computers (up 3.96% to Rs 483.80), Infosys Technologies (up 0.83% to Rs 1955) and Wipro (up 2.86% to Rs 547.20) advanced. The BSE IT Index advanced 1.7% to 4,957.57, and was the top gainer among the BSE sectoral indices.

More action was seen in mid-cap software stocks. i-flex solutions (up 1.16% to Rs 2399.95), Mastek (up 1.28% to Rs 285), Rolta India (up 0.47% to Rs 449), Polaris Software (up 4.2% to Rs 167.10), MphasiS (up 5.72% to Rs 329.35), Infotech Enterprises (up 1.18% to Rs 387), Zensar Technologies (up 0.46% to Rs 348.25), and Subex Azure (up 0.75% to Rs 614.10) advanced.

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.

Aluminium and copper major Hindalco Industries advanced 3.46% to Rs 153.90 on 20.97 lakh shares. The market has been rife with speculation, this week that Alcan may team up with Sterlite Industries to bid for Hindalco.

Reliance Communications (RCOM) was up 1.25% to Rs 523. It added 1.4 million subscribers in May 2007, taking its total mobile user base to 30.5 million. The firm had added 1 million mobile subscribers in April 2007.

RCOM is said to be awaiting allocation of spectrum from the government for national roll-out of its GSM service. The company had earlier applied for additional spectrum allocation to the government. It also launched a special lifetime validity offer of Rs 222 for its GSM subscribers.

Two-wheeler maker Bajaj Auto declined 2.85% to Rs 2155, and was the top loser from the Sensex pack. Hero Honda shed 2.36% to Rs 697. As per reports, bike sales have hit the slow lane, forcing bike makers to rationalise production and reduce dealer inventories.

Other auto stocks Tata Motors (down 1.16% to Rs 679) and Maruti Udyog (down 2.25% to Rs 759.50) were not spared either. The BSE Auto index shed 1.2% to 4,812.08

Index heavyweight Reliance Industries (RIL) slipped 1.34% to Rs 1664.80, on 9.33 lakh shares. It moved in a range of Rs 1661 - Rs 1705.95.

State Bank of India (SBI) declined 2.10% to Rs 1359.05 and Oil & Natural Gas Corporation (ONGC) lost 0.72% to Rs 858.

Investors dumped FMCG shares, with the FMCG index sliding 1.7% to 1,811.60. It was the biggest loser among the sectoral indices on BSE. ITC (down 1.96% to Rs 155.25) and Hindustan Unilever (down 1.92% to Rs 191.50) declined.

Larsen & Toubro declined 0.87% to Rs 1902.80 despite bagging a contract in United Arab Emirates from ENOC Processing Company (EPCL), Dubai, UAE, for the mechanical erection work of the new process plants of ENOC's naphtha hydro-treated reformer project. The estimated value of the contract is $ 51million.

Reliance Communications was the top traded counter on BSE with turnover of Rs 211.75 crore followed by Nitin Fire Protection Industries (Rs 207.25 crore), Reliance Industries (Rs 159 crore), IFCI (Rs 125 crore) and State Bank of India (Rs 121 crore).

Industrial Finance Corporation of India (IFCI) led the volumes chart with 2.52 crore shares followed by Reliance Natural Resources (85.60 lakh shares), G V Films (64.20 lakh shares) and Srei Infrastructure Finance (61.51 lakh shares).

Shares of refining companies declined on fresh selling even as petrol and diesel prices were raised marginally in the national capital following the state government's decision to levy sales tax on the two auto fuels. Hindustan Petroleum Corporation (HPCL) (down 1.73% to Rs 272.20), Indian Oil Corporation (IOC) (down 1.13% to Rs 440), Bongaigaon Refinery and Petrochemicals (down 0.33% to Rs 48.60), Chennai Petroleum (down 0.37% to Rs 240.05), and MRPL (down 1.11% to Rs 40), declined.

Petrol has become dearer by Rs 0.67 a litre to Rs 43.52 per litre while diesel price has increased from Rs 30.25 a litre to Rs 30.48 per litre, in Delhi.

Suzlon Energy spurted 4.56% to Rs 1370 after the firm announced after market hours on Wednesday, 6 June 2007, that its subsidiary has bagged a contract from a US company to supply 300 turbines. US-based Suzlon Wind Energy Corporation, the step-down subsidiary of Suzlon Energy, has signed a contract for a total of 300 units of 630 mega watt (MW) of wind turbine capacity with Edison Mission Group of Irvine, California, the USA. The two phase contract calls for delivery of 315 MW of turbine capacity in 2008 and another 315 MW of capacity in 2009.

Industrial Finance Corporation of India (IFCI) jumped 5.36% to Rs 50.15 on reports the company has received income tax refund of Rs 380 crore on account of some extra provisioning from previous years, and would add to the profits of this quarter Q1 June 2007. The reports of IFCI getting the refund hit the market after trading hours on Wednesday, 6 June 2007.

Ispat Industries rose 2.95% to Rs 15.70 after the steel maker reported turnaround results in Q4 March 2007. Ispat Industries posted net profit of Rs 82.12 crore in Q4 March 2007 as against net loss of Rs 153.14 crore in Q4 March 2006. Sales rose 64.37% to Rs 2105.26 crore in Q4 March 2007 as against Rs 1280.83 crore in Q4 March 2006.

The company reported net loss of Rs 9.53 crore in the year ended 31 March 2007, much lower than a net loss of Rs 812.67 crore in the year ended March 2006. Sales rose 51.35% to Rs 7486.57 crore (Rs 4946.55 crore).

Gujarat State Petronet was down 2.10% to Rs 54. It reported 78.52% spurt in net profit 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 (Rs 67.47 crore). 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 (Rs 263.47 crore).

Alstom Projects India gained 1.68% to Rs 579.50 after the power equipment maker said during market hours on Wednesday its consortium won Rs 255 crore contract from the Delhi Metro Rail Corporation. The contract involves design, manufacture, supply, installation and commissioning of train control & signaling System for DMRC's Metro Line 1 and 2 extensions.

Sical Logistics vaulted 7% to Rs 266.30 on winning operations and maintenance bid for 17 vessels from Oil and Natural Gas Corporation. Sical Logistics announced today 7 June 2007, that it has won the operations and maintenance bid for 17 vessels from Oil and Natural Gas Corporation (ONGC). Sical also said offshore logistics would contribute at least 30% to 2007-08 revenues.

Most of the European indices which had opened firm pared gains later. In contrast, Asian markets recovered from early losses. Japan's Nikkei was up 0.07% at 18,053.38. Earlier during the day, it had shed about 0.8%. South Korea's Seoul Composite had moved into the green from red, during the day. It was up 0.62% at 1,753.04. Taiwan's Taiwan Weighted was up 0.49% or 8,355.26. China's Shanghai Composite index was up 3.03% at 3890.80

British interest rates are likely to remain unchanged at a six-year peak of 5.5% today (by evening), when Bank of England (BOE) policymakers convene, but another hike is due in the near future as the bank seeks to tame inflation.

US stocks slid for a second straight session yesterday, 6 June 2007, after an increase in labour costs stirred concerns about inflation and interest rates and as the yield on the benchmark 10-year treasury flirted with 5%. The Dow Jones fell 129.79 points, or 0.95%, to 13,465.67, losing more than 210 points in two days.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 0.89%, to 1,517.38, and the Nasdaq composite index fell 0.92% to 2,587.18.

On Wednesday, 6 June 2007, the European Central Bank (ECB) raised its key interest rate a quarter percentage point to 4% in the eighth increase in 18 months, and the highest reading for five and a half years. It also signalled a further hike could come - perhaps in September 2007- to combat inflation in a dynamic eurozone economy.

Oil prices were higher in Asian trading after news that refinery production in the US fell last week at the same time as the peak season there for demand for gasoline began. The New York Mercantile Exchange's main oil futures contract, light sweet crude for delivery in July, was up $0.07 at $66.03 per barrel from $65.96 in late trading in the US overnight. Brent North Sea crude for July had added $0.05 at $71.07

As per provisional data, FIIs were net sellers to the tune of Rs 287.17 crore today, 7 June 2007. Domestic institutions were net buyers to the tune of Rs 283.81 crore today.