Sensex snaps three-day rally

The market saw a complete trend reversal in today’s (17 July 2007) trading session. After remaining firm till early-afternoon trade, the market turned volatile later and started declining on profit booking at higher level. Weakness in European stocks weighed on the domestic bourses.

Shares from metal, auto and banking pack declined, while cement, IT and real-estate stocks saw buying interest.

The BSE 30-share Sensex lost 21.40 points or 0.14% at 15,289.82. It opened higher at 15,357.60 and surged to strike an all-time high of 15,440.20 at 10:43 IST. The index slipped to a low of 15,272.46 at 15:13 IST, as selling intensified

Prior to today’s fall, the Sensex had risen 400.60 points to a record closing high of 15,311.22 on 16 July 2007, from 14,910.62 on 11 July 2007

The S&P CNX Nifty also struck an all-time high of 4,550.25 today. It lost 15.40 points or 0.34% at 4,496.75. The Nifty July 2007 futures settled at 4485, a discount of 11.75 points compared to spot closing.

The market breadth turned negative as selling emerged in small- and mid-cap stocks. On BSE, 1,724 shares declined as compared to 985 that advanced, while 62 remained unchanged. The market breadth was strong in opening session, but declined as the day progressed.

The BSE Mid-Cap Index slipped 45 points or 0.70% to 6,789.57 after striking an all time high of 6,906.04. The BSE Small-Cap index declined 73 points or 0.88% to 8,207.77, after hitting an all time high of 8,354.60.

The total turnover on BSE amounted to Rs 6,023 crore as against Rs 5,392.11 crore on Monday, 16 July 2007. The NSE F&O turnover was Rs 45,837.68 crore as compared to Rs 38884.18 crore on Monday, 16 July 2007

Among the Sensex pack, 19 declined while the rest advanced.

The ongoing infrastructure boom continued to boost cement stocks. Cement major Ambuja Cement advanced 3.15% to Rs 137.50 and was the top gainer from the Sensex pack: 19.84 lakh shares were traded in the counter on BSE.

JK Cement (up 0.97% to Rs 156.10), Birla Corporation (up 0.86% to Rs 294), and Madras Cement (up 1.22% to Rs 3540) were the other gaines from the cement pack.

Index heavyweight Reliance Industries (RIL) rallied to an all-time high of Rs 1,834 on reports it had made a gas discovery in the Cauvery basin. It settled 2.80% higher to Rs 1,826.25, on 9.14 lakh shares. The size of the discovery will be known after appraisals. The company had acquired the block under the third round of exploration bidding. It has sent the discovery notice on the find to the directorate general of hydrocarbons (DGH).

Led by RIL, the BSE Oil and Gas Index advanced 1.46% to 7,990.02 ands was the top gainer among the sectoral indices on BSE.

IT stocks staged a comeback, led by better-than-expected results from TCS. The BSE IT Index gained 0.65% at 4,874.93.

TCS jumped 2.23% to Rs 1,153. After market hours on Monday, 16 July 2007, TCS posted a 36% surge in net profit to Rs 1,202.93 crore in the first quarter ended June 2007 compared to Rs 882.66 crore in Q1 June 2006. Total income advanced 27% at Rs 5,364.67 crore (Rs 4,225.62 crore). Growth in revenue and profit was 0.8% and 0.7%, respectively, compared to the fourth quarter ended March 2007. TCS does not make sales and profit forecasts.

Satyam Computer Services advanced 1.23% to Rs 488 on bagging four major deals in Singapore, Australia and UAE for IT services and outsourcing. Two of these deals from the Singapore government are primarily outsourcing and IT services contracts. All these deals are among the largest hauls to-date in the specific regions following its participation in recent public and private tenders.

Wipro gained 1.25% to Rs 507. However Infosys slipped 0.07% to Rs 1,933.

Auto stocks saw profit booking after a recent rally, as crude oil headed towards $75 per barrel mark. Mahindra & Mahindra (M&M) slumped 2.46% to Rs 801, and was the top loser from the Sensex pack.

Tata Motors (down 1.70% to Rs 746.30) and Bajaj Auto (down 1.70% to Rs 2217) were the other losers from the auto sector. The BSE Auto Index lost 1.3% to 5,015.57.

Banking pivotals State Bank of India (down 2.37% to Rs 1,575.25) and HDFC Bank (down 1.55% to Rs 1,196.95) slipped on profit booking. The BSE Bankex slipped 0.4% at 8,353.68.

Shares of state-run banks declined on profit taking after a recent surge. Indian Overseas Bank (down 1.76% to Rs 133.80), Canara Bank (down 3% to Rs 285), Union Bank of India (down 3.23% to Rs 151.50), and Vijaya Bank (down 1.86% to Rs 55.45) edged lower. All these shares slipped sharply from their day’s highs.

Karnataka Bank (up 7.36% to Rs 197.60) and Allahabad Bank (up 1.35% to Rs 101.25) rallied.

Shares from the real-estate sector surged on the belief that interest rates have peaked and the Reserve Bank of India may not raise them further in its monetary policy review on 31 July 2007. The overall buoyancy was reflected from the BSE Realty index, which surged to its lifetime high of 8,144.94 in intra-day trade today, 17 July 2007.

Indiabulls Real Estate (up 5.62% to Rs 592.20), Akruti Nirman (up 4.68% to Rs 516.75), and DLF (up 0.91% to Rs 616.40) gained. Unitech lost 0.76% to Rs 555.40.

Metal stocks slipped on selling pressure. The BSE Metal Index declined 1.85% to 11,868.44, and was the top loser from sectoral indices on BSE.

Tata Steel (down 1.83% to Rs 681.55), Sterlite Industries (down 4.50% to Rs 635), JSW Steel (down 3.42% to Rs 697), and Sail (down 2.98% to Rs 153.25) edged lower from the metal pack.

The BSE Capital Goods Index lost 1.74% to 12,782.07. Siemens India (down 8.06% to Rs 1340), Praj Industries (down 3.35% to Rs 435), Bhel (down 2.23% to Rs 1,622), ABB (down 2.13% to Rs 1088), L&T (down 1.42% to Rs 2,379), and Alstom Projects (down 2.07% to Rs 838), declined on profit booking.

Celestial Labs settled at Rs 67.20 on BSE, a premium of 12% over the IPO price of Rs 60. The scrip debuted at Rs 70, touched a high of Rs 75 and a low of Rs 66.15 during the day. On BSE, 77.87 lakh shares were traded in the scrip.

Reliance Natural Resources (RNRL) rose 3.6% to Rs 43.15 on high volumes of 2.32 crore shares. The stock rose ahead of Bombay High Court's final verdict on the allocation of gas from Reliance Industries' (RIL) Krishna-Godavari block, due on 18 July 2007.

Tata Power declined 3.45% to Rs 670 on turning ex-dividend. It had distributed a dividend of Rs 9.50 a Rs 10 share. The company had announced the dividend on 30 May 2007

FCI OEN Connectors rose 2.63% to Rs 687 after parent FCI of France set an exit price of Rs 700 per share to delist the shares of the Indian unit.

Mastek rose 3.91% to Rs 343.05 after it acquired 90% stake in US-based Vector Insurance Services LLC, a technology solutions provider and third party administrator that focuses on the North American life and annuity insurance industry, on Monday, 16 July 2007. The acquisition is being funded through internal accruals.

Tata Tea slipped 3.80% to Rs 822 on reporting 3.50% fall in net profit in Q1 June 2007 to Rs 43.00 crore as against Rs 44.56 crore in Q1 June 2006. Sales rose 14.02% to Rs 290.01 crore (Rs 254.35 crore).

Dolphin Offshore 10.52% to Rs 250 after it posted a 59.24% fall in net profit to Rs 2.47 crore in Q1 June 2007 as against Rs 6.06 crore in Q1 June 2006

Indiabulls Financial Services surged 4.46% to Rs 674 after 13.7 lakh shares changed hands in a block deal on the BSE at Rs 655.50 each

Bharat Earth Movers (BEML) slipped 2.19% to Rs 1,197 after 49 lakh shares issued in its recently concluded follow-on public offer (FPO), were admitted to trading on the bourses today, 17 July 2007. BEML had priced its FPO at Rs 1,075 per share. The FPO received a good investor response. The FPO was subscribed 30.65 times. The issue closed on Tuesday, 3 July 2007.

Zee News jumped 10.75% to Rs 49.95 after reporting a net profit of Rs 6.38 crore on sales of Rs 74.46 crore in Q1 June 2007. Figures for the corresponding period in the previous quarter were not available. Its operating profit stood at Rs. 11.91 crore. During this period, advertisement revenue was Rs 59.24 crore and the subscription revenue was at Rs 13.64 crore. The company had declared the results after market hours, yesterday, 16 July 2007.

Lanco Infratech declined 1.43% to Rs 251 following two special purpose vehicles of the company bagging contract for construction and operation of two road projects in Karnataka under the national highways development project. The project involves six laning of 16 km stretch and four laning of the remaining stretches. The total project cost is estimated at Rs 1,006 crore. The concession periods are 20 and 25 years for the two projects, respectively, including 30 months of construction period.

Asian markets were mixed today, 17 July 2007, with Japanese shares of insurers such as Mitsui Sumitomo Insurance and electricity generators such as Tokyo Electric Power Co. slipping after a powerful earthquake rocked northwestern Japan on Monday, 16 July 2007. Nikkei slipped 0.12% at 18,217.27.

However, Hong Kong's Hang Seng (up 0.45% at 23,057.30), Taiwan's Taiwan Weighted (up 0.98% to 9,509.73) and Shanghai Composite (up 1.94% to 3,896.19) edged higher.

All the European markets were trading with losses, except Spain’s Madrid General which rose 0.59%.

US blue chip stocks gained on Monday, 16 July 2007, as news of a potential big telecom deal involving Verizon pushed the Dow Jones Industrial Average to a new record close, and put the index closer to 14,000. The Dow rose 43.73 points, or 0.31%, to 13,950.98. The benchmark index again set a high of 13,989.11, less than 11 points from 14,000.

Broader stock indicators, however, slipped. The Standard & Poor's 500 index slipped 2.98 points, or 0.19%, to 1,549.52. The S&P also set a fresh trading high of 1,555.90. The Nasdaq Composite index fell 9.67 points, or 0.36%, to 2,697.33.

Oil prices rose above $74 a barrel on concerns arising from closure of a North Sea pipeline and a sense that more operating refineries will increase demand for oil. On the Nymex, light, sweet crude for August delivery gained 22 cents to settle at $74.15 a barrel.

The Prime Minister’s Economic Advisory Council, on Monday, 16 July 2007 projected India’s GDP growth at 9% in 2007-08. It has warned that the constraints posed by farm and power sectors may make sustaining this level difficult in the years ahead. In its report, the Council expected inflation to remain close to 4%