Sensex settles above 14,200; firm global markets aid recovery

The market which saw series of wild swings in first half of the day amid negative bias, surged in the second half on value buying coupled with short covering. Strong Asian and European markets today, 22 August 2007, boosted local bourses. The market breadth recovered from early weakness, but still ended negative.

Today's recovery is commendable, coming in the backdrop of Tuesday (21 August 2007)’s 438-point fall in Sensex that was triggered by concerns arising from the fluid political situation in New Delhi, with the prospect of a general election looming large

Sensex gained 259.55 points or 1.86% to settle at 14,248.66. It had opened with an upward gap of 66.29 points at 14,055.40. Sensex hit high of 14,281.48 and low of 13,870.70. Sensex swung in a band of 410.78 points for the day.

At the day's high, the Sensex had gained 292.37 points. It had lost 118.41 points at the day's low.

The benchmark index, BSE Sensex, is down 1620.19 points from its all time high of 15,868.85, struck on 24 July 2007.

The S&P CNX Nifty advanced 78.25 points or 1.92% at 4153.15. The Nifty August 2007 futures settled at 4153.70, a marginal premium of 0.55 points as compared to the spot closing.

The market breadth was weak on BSE with 1568 shares declining as compared to 1122 that advanced, while 67 remained unchanged.

The BSE Mid-Cap Index rose 0.41% to 6,159.62 while the BSE Small-Cap Index lost 0.26% to 7,518.70. Both these indices underperformed the broad market.

The total turnover on BSE amounted to Rs 4387 crore as against Rs 4867 crore on Tuesday, 21 August 2007. The NSE F&O turnover was Rs 51749.70 crore, as compared to Rs 45485.53 crore on Tuesday, 22 August 2007.

Most of the sectoral indices on BSE settled with gains. The BSE Metal index (up 2.38% to 10,081.33), BSE TECk index (up 1.88% to 3,421.97), BSE Capital Goods index (up 3.40% to 12,397.50) and BSE FMCG Index (up 2.38% to 1,841.90), outperformed the Sensex

BSE IT index (up 1.25% to 4,348.53), BSE PSU index (up 1.26% to 6,573.94), BSE Oil & Gas index (up 1.39% to 7,511.33), BSE Consumer Durables (down 0.09% to 3,968.76), BSE Bankex (down 0.87% to 7,387.92), BSE Realty index (down 0.55% to 6,806.90) and BSE Health Care index (down 0.13% to 3,426.00) and BSE Auto index (down 0.03% to 4,473.79), underperformed the Sensex.

Among the 30-member Sensex pack, 27 advanced while the rest slipped.

Reliance Energy, the country’s second largest power generation and distribution company in terms of sales jumped 5.92% to Rs 733 on 12.55 lakh shares. It was the top gainer from Sensex pack. The stocks lost 8.20% to Rs 692 on 21 August 2007 from Rs 748.30 on 10 August 2007.

India’s leading power equipment maker Bharat Heavy Electricals soared 4.69% to Rs 1665 after winning contracts worth Rs 6500 crore for setting up power project units. The orders have been placed by Damodar Valley Corporation (DVC).

India’s largest listed cellular operator, Bharti Airtel surged 4.22% to Rs 847.55 on reports it will double its tower capacity to 80,000 by March 2008 as it grows its network to reach more towns and cities across the country, while expanding in the metros. Currently it has 40,000 towers.

Shares from metal sector recovered from sharp recent fall that was triggered by falling metal prices on London Metal Exchange (LME). India’s largest private sector steel maker Tata Steel surged 3.96% to Rs 567.70.

Other metal stocks, Sterlite Industries (up 4.31% to Rs 567.10), Sesa Goa (up 1.28% to Rs 1736.10) and Hindustan Zinc (up 2.47% to Rs 692), also edged higher

Dr Reddy's Laboratories rose 1.50% to Rs 631, recovering from a low of Rs 612.20 after it got an approval from the US Food and Drug Administration for cholesterol-lowering simvastatin tablets.

India’s largest cigarette manufacturer ITC jumped 3.94% to Rs 158.20 on high volumes of 26.07 lakh shares. As per reports, ITC has taken over Australian agri-biotech company Technico Pty for an undisclosed sum as part of a strategy to strengthen its foods business. The deal was executed through its subsidiary Russell Credit, ITC, which recently launched its Bingo brand potato chips. Technico provides bulk potato supply chain management.

Reliance Industries (RIL), the country’s top private sector entity by market capitalisation and oil refiner rose 1.47% to Rs 1773 on 10.64 lakh shares. It had slipped to day’s low of Rs 1717. As per reports, RIL will foray into solar power generation through pilot projects that will supply electricity to a few villages in Maharashtra. In the next 8-12 months, pilots will be launched in 38 villages in Maharashtra.

India’s third largest pharma company in terms of sales Cipla saw intense volatility. It rose 0.23% to Rs 177.60 on 11.20 lakh shares. The stock recovered sharply from day’s low of Rs 160.

India’s top truck maker Tata Motors lost 2.10% to Rs 621 and was the top loser from Sensex pack.

State Bank of India (down 0.58% to Rs 1455.25) and HDFC (down 0.16% to Rs 1898.55), were the other losers from Sensex pack.

Reliance Industries topped the turnover chart on BSE with turnover of Rs 188.77 crore followed by State Bank of India (Rs 150.26 crore), Zylog Systems (Rs 145.45 crore), GMR Infrastructures (Rs 127.64 crore) and Orbit Corporation (Rs 101.31 crore).

Real estate stocks slumped on selling pressure. Ansal API (down 3.23% to Rs 247.50), Parsvnath Developers (down 1.94% to Rs 274.80), Unitech (down 3.14% to Rs 459), and Sobha Developers (down 0.96% to Rs 735.20), slumped. The BSE Realty index lost 17.97% to 6,738.53 on 21 August 2007 from 8,183.02, on 20 July 2007.

India's largest real estate developer in terms of market capitalisation DLF rose 0.80% to Rs 560.60. It clinched a deal to develop an integrated town ship in Kolkata. DLF also launched its first IT SEZ at Nagpur, Maharashtra on 140 acres of land. This SEZ project will involve an investment of about Rs 1000 crore. The IT Park is expected to be operational in a period of 3 years and being an IT SEZ, it would cater to all the international and national IT/ITES companies.

Jaiprakash Hydro Power slipped 0.86% to Rs 46.30 after the National Stock Exchange banned fresh positions in the derivatives contracts of the stock as it had crossed the 95% position limit.

Deccan Aviation jumped 5.22% to Rs 140.10 on reports that the airline plans to increase fares in a range of Rs 500-1000 per seat to become profitable, and the company expects to break-even by April-June 2008 quarter.

MNC associate engineering company Siemens surged 9.35% to Rs 1235 after Peter Loscher, president and CEO of Siemens AG affirmed that Siemens group is looking at doubling its sales in India in the next three years by focussing on healthcare, infrastructure and energy.

India's largest listed airline firm in terms of revenue Jet Airways was up 3.18% to Rs 762 on reports the airline has received the government’s permission to fly to three new foreign destinations—Birmingham, Madrid and Geneva.

Patni Computer Systems jumped 5.98% to Rs 444 on recent reports that two US private equity funds Texas Pacific Group and Apax Partners, are close to buying stakes of two Patni promoters Ashok and Gajendra in Patni Computer Systems. The Patni ADR jumped 9.5% on New York Stock Exchange (NYSE) on Tuesday, 21 August 2007.

Macmillan India rose 2.20% to Rs 263 after its board of directors at its meeting held on 21 August 2007 approved the acquisition of majority shareholders of Frank Bros and Company Publishers, a renowned publishing company with 70 years of presence with a loyal customer base.

Lanco Infratech gained 1.43% to Rs 241 after it received letter of acceptance from Airports Authority of India for construction of a new Terminal Building at Varanasi Air Port at negotiated amount of Rs 82.39 crore. The company made this order win announcement after market hours on Tuesday, 21 August 2007

Among the side counters, Rasoi (up 20% to Rs 246), SEL Manufacturing (up 20% to Rs 171.35), Sujana Tower (up 20% to Rs 146.60), Chambal Fertilisers (up 16.55% to Rs 50), Dollex Sahara Housing (up 10% to Rs 68.20), and Baba Arts (up 12.18% to Rs 59.40), advanced.

Zee News (down 15.38% to Rs 55), Monnet Sugar (down 13.80% to Rs 30.95), Jindal Hotels (down 9.69% to Rs 39.60), Siel (down 9.06% to Rs 25.60) and Sterling Tools (down 8.84% to Rs 65) declined sharply.

Indian Hotels rose 0.64% to Rs 118.65 after a block deal of 21.90 lakh shares was struck on counter at Rs 117.90 per share on BSE at 10:02 IST.

Carborundum Universal slipped 1.43% to Rs 172.50. The company said on Tuesday, 21 August 2007, it had entered into an agreement to acquire the industrial ceramics division of IVP.

Shares of the fourth largest public sector bank in terms of operating income Bank of India was down 2.25% to Rs 217.25, off from a low of Rs 206.15 after the bank decided to revalue some of its properties taking into account the appreciation in their value.

India's fifth-largest software company by sales HCL Technologies was up 2% to Rs 295.50 after it said it would acquire the balance 49% stake in HCL EAI Services Inc. HCL Technologies, through its unit HCL America Inc, already holds 51% of HCL EAI. HCL EAI develops and deploys enterprise application integration services for customers globally.

In Europe, key benchmark indices in London, Germany and France rose between 0.80% to 1.20%.

All the Asian indices settled higher today, 22 August 2007. Hong Kong's Hang Seng (up 2.84% to 22,346.86), Singapore's Straits Times (up 2.88% to 3,321.50), South Korea's Seoul Composite (up 1.34% to 1,759.5) and Shanghai Composite (up 0.50% to 4,980.75) gained.

However, Japan's Nikkei was unchanged at 15,900.64

The Dow Jones industrial average fell 30.49 points, or 0.23%, to end at 13,090.86 on Tuesday, 21 August 2007. But the Standard & Poor's 500 Index inched up 1.57 points, or 0.11%, to 1,447.12. The Nasdaq Composite Index gained 12.71 points, or 0.51%, to 2,521.30.

Oil nudged up from intra-day steep losses on Wednesday, 22 August 2007 as traders looked toward an expected decline in weekly US crude and gasoline stocks after discounting the threat of a significantly weakened Hurricane Dean to oil flows. US crude gained 30 cents to $69.87 a barrel.

With the Indo-US nuclear deal hotting up the political scene, the Communist Party of India (Marxist), or CPI(M), top brass is meeting today to decide on the next steps amid signals that the government is in no mood to heed its ultimatum on the contentious issue. The two-day Central Committee meeting of the Marxist party has to take tough decisions on how far it could go in its opposition to the government in the critical matter, amid growing apprehensions of a mid-term election.

The meeting comes at a time when the ruling Congress has indicated that the government will go ahead with negotiations with the IAEA in September 2007 in connection with the deal, notwithstanding Left objections. The Left party is maintaining that negotiations with IAEA on the safeguards agreement would bind India in perpetuity.

Meanwhile, the CPI has also called an emergency meeting of its National Executive on 28 and 29 August 2007 to decide on the ''next steps'' in view of the standoff between government and Left parties.

Recently, the Indian markets had underperformed its Asian peers due to political concerns. The benchmark index BSE Sensex lost 1879.74 points or 13.43% to 13,989.11 on 21 August 2007 from its all time high of 15,868.85, struck on 24 July 2007. The sharp fall was due to selling pressure from FIIs, who sold shares worth Rs 8,548.30 crore in the month of August, till 20 August 2007. In the month of July 2007, they pumped Rs 23,872.40 crore in the Indian equity market.