Weak European markets pull Sensex down in total trend reversal

The market witnessed a complete trend reversal today. It started declining sharply since mid-afternoon trade on intense selling pressure at higher levels, after European indices opened weak and Asian indices also started coming off their highs. Earlier, trading on domestic bourses had resumed on an optimistic note today, 9 August 2007, on strong buying demand for index pivotals, tracking firm US markets overnight. All the sectoral indices on BSE ended in the red.

The BSE 30-share Sensex was down 207.83 points or 1.36% at 15100.15. It opened with a 144.46-point upward gap at 15,452.44 and cruised ahead to hit a high of 15,542.40, at 10:31 IST. It slipped to a low of 15,062.10 at 15:06 IST.

It oscillated 480.10 points for the day

The S&P CNX Nifty declined 58.90 points or 1.32% at 4,403.20. The Nifty August 2007 futures settled at 4355, a sharp discount of 48.20 points as compared to spot closing

All the European markets were trading lower today, 9 August 2007 as BNP Paribas suspended redemptions from three funds citing problems in US subprime mortgages. The news came just at a time when worries about global credit problems arising from US subprime mortgatge woes appeared to be easing.

The market breadth which was strong till mid-afternoon trade on BSE turned negative, as small-cap and mid-cap stocks succumbed to selling pressure: 1,660 shares declined as compared to 1,065 that advanced, while 51 remained unchanged

The BSE Mid-Cap index lost 1.59% to 6,559.58 while the BSE Small-Cap index lost 1.08% to 7,964.12

The total turnover on BSE amounted to Rs 5036 crore as compared to Rs 4732 crore on Wednesday, 8 August 2007.

The NSE F&O turnover was Rs 55,930.24 crore as compared to Rs 42084.83 crore on Wednesday, 8 August 2007.

Among the 30-member Sensex pack, 23 declined while the rest advanced.

India’s leading power equipment maker Bharat Heavy Electricals was up 1.26% to Rs 1734, off its days high of Rs 1786. The stock surged after it bagged a contract worth Rs 2900 crore for building three 500-megawatt units in north India. It was the top gainer from the Sensex pack.

Larsen & Toubro (L&T), declined 1.47% to Rs 2456. The stock hit a high of Rs 2600 on reports that it is set to invest Rs 100 crore in Mysore-based Rangsons Electronics for a 40% stake. Rangsons Electronics is a Rs 70-crore electronic manufacturing solutions provider and one of the preferred suppliers for L&T’s electrical & electronics division. L&T had risen 4.35% over the last one month to 8 August 2007.

The BSE Capital Goods Index was down 1.14% at 12,883.72

Reliance Communications (RCom) lost 1.33% to Rs 536.90. It struck a high of Rs 554.20 buoyed by the completion of the private placement of 5% equity shareholding in its telecom infrastructure arm, Reliance Telecom Infrastructure (RTIL), at a valuation of Rs 27000 crore ($ 6.75 billion). The placement has been made with seven leading international financial investors. The company made this announcement after market hours on Wednesday, 8 August 2007.

Pharma shares Cipla (up 0.67% to Rs 187.55), and Dr Reddy’s Laboratories (up 1.23% to Rs 638) gained, as they are considered as defensive shares in falling market.

India’s biggest aluminium company Hindalco Industries slipped 3.77% to Rs 155.75 on 8.72 lakh shares. It was the top loser from Sensex pack

ICICI Bank, the country’s largest private sector bank in terms of net profit, rose 0.37% to Rs 887.10, on reports that the Foreign Investment Promotion Board (FIPB) is expected to reconsider the much-discussed proposal of infusion of foreign funds into its holding company at its next meeting on 17 August 2007. The stock came off session's high of Rs 919.80

India’s largest bank, State Bank of India (SBI) slumped 3.57% to Rs 1645. The stock came off from a high of Rs 1736. Other banking shares also attracted selling. The BSE Bankex slipped 1.25% at 7,975.48.

Kotak Mahindra Bank (down 3.16% to Rs 768.50), HDFC Bank (down 1% to Rs 1160), Oriental Bank of Commerce (down 2.30% to Rs 231.50), Punjab National Bank (down 2.17% to Rs 510.10), Bank of India (down 3.20% to Rs 245), Bank of Baroda (down 5.07% to Rs 298), Axis Bank (down 2.56% to Rs 609.90) and Allahabad Bank (down 3% to Rs 92) edged lower.

Ambuja Cements was down 1.27% to Rs 128 after it said it had stopped operations at its plants in Gujarat state due to heavy rains and floods. The company said it was in the process of estimating losses from the flood and had full insurance cover.

India’s largest private sector enterprise Reliance Industries (RIL) lost 1.91% to Rs 1839.80 on 10.55 lakh shares. RIL is understood to be keen on picking up a stake in the proposed 4,00,000-barrel-a-day Jizan refinery project in Saudi Arabia.

IT shares declined today, after a sharp rally yesterday, 8 August 2007 when the government on Tuesday, 7 August 2007, tightened external commercial borrowing (ECB) norms. The BSE IT index lost 1.55% to 4,733.85. It had surged 4.11% to 4,808.43, yesterday.

Infosys Technologies (down 1.83% to Rs 1931.50), Satyam Computers (down 2.77% to Rs 466) and TCS (down 1.10% to Rs 1141), slipped. The Indian rupee was trading at 40.51 against the US dollar.

Auto stocks ended on a weak note. The BSE Auto Index slipped 0.86% to 4,769.15. Maruti Udyog (down 1.72% to Rs 823), Mahindra & Mahindra (down 0.43% to Rs 687), and Bajaj Auto (down 0.85% to Rs 2291), slipped.

Hero Honda Motors (up 0.36% to Rs 680) and Tata Motors (up 0.45% to Rs 664) gained.

At present, all passenger vehicles are charged 24% excise duty but small cars are charged only 16%. Two- and three-wheelers also fall under the 16% bracket. The auto industry has been asking for 16% to be the highest excise slab for all automobiles.

Housing Development Finance Corporation (HDFC) declined 2.22% to Rs 2020, off its day’s high of Rs 2099

National Thermal Power Corporation (NTPC), slipped 1.46% to Rs 168.55. The stock came off a high of Rs 176. As per reports it is targeting 50,000 megawatt (MW) by 2012. As on date, the installed capacity of NTPC is 27,904 MW.

Omaxe settled at Rs 349.95 on BSE, a premium of 12.90% over IPO price of Rs 310. The stock debuted at Rs 400 on BSE. The stock had hit a low of Rs 341.50 and high of Rs 410 during the day. On BSE, 1.20 crore shares changed hands in the counter. The IPO of Omxe had received strong investor response. It was subscribed 68 times. The company had priced the IPO at the top end of the Rs 265 to Rs 310 price band. The National Stock Exchange (NSE) has included Omaxe in futures & options (F&O) segment. The lot size of Omaxe in F&O is set at 650.

Assam Company (up 9.90% to Rs 21.10), Shringar Cinemas (up 8.16% to Rs 61.65), Atlanta (up 10% to Rs 254.95), HOV Services (up 10% to Rs 176.30) and DCB (up 6.83% to Rs 12.20) were the key gainers from the small-cap and mid-cap basket.

Shree Precoated Steels (down 10% to Rs 303), Selan Exploration (down 7% to Rs 120), Shakti Pumps (down 6.70% to Rs 146.20), Zee News (down 6.50% to Rs 66.95), Kale Consultants (down 5.72% to Rs 94) and HTMT Global (down 5.64% to Rs 373) were the key losers from the small-cap and mid-cap basket.

ICSA (India) galloped 13.60% to Rs 1819.70, riding on the back of splendid Q1 results. Its net profit rose 95.42% to Rs 23.92 crore in Q1 June 2007 over Q1 June 2006. Net sales vaulted 107.04% to Rs 122.63 crore in Q1 June 2007 over Q1 June 2006. The results were announced on 30 July 2007.

Mercator Lines jumped 8.25% to Rs 53.15 after it said it acquired a 2006 built vessel ‘Dredger’ having a capacity to dredge 4500-5000 cubic meters of material with an aim of diversifying into the lucrative area of dredging sector.

IFCI dropped 5.10% to Rs 61.50 after the National Stock Exchange banned taking fresh positions in the derivatives contracts.

Modern Dairies jumped 5% to Rs 71.80 on reports Reliance Retail, a unit of Reliance Industries, is in talks to buy a stake in north-India based firm.

Motherson Sumi Systems advanced 1.86% to Rs 131.15 on forming a joint venture with UK-based Calsonic Kansei based in England to meet the growing needs of the automotive manufacturers in India including the new car makers who have announced their plans to set up manufacturing base in India.

Aegis Logistics rose 1.43% to Rs 145.10 following its announcement yesterday, 8 August 2007, of a board meet on 10 August 2007 to consider an acquisition.

Lanco Infratech rose 4.05% to Rs 282.60, extending its recent rally triggered by strong Q1 results. Lanco's consolidated net profit rose 1103.9% to Rs 51.29 crore on 135.42% rise in sales to Rs 591.44 crore in Q1 June 2007 over Q1 June 2006.

Tayo Rolls was up 1.46% to Rs 268 after its board approved setting up engineering forging and forged roll project with investment of Rs 142.50 crore. The project envisages setting up integrated facilities for manufacturing forging quality ingots, forged bars, engineering forgings and forged rolls. The board also approved to tie-up with UK-based Sheffield Forgemasters for technical know-how.

Sangam (India) rose marginally by 0.27% to Rs 56.15 after it said its order book stood at Rs 135 crore as on 31 July 2007 that includes export orders worth Rs 65 crore. Further, the company said it would be entering technical textile fabric segment to cater to the institutional needs of various industries.

Tata Tea slipped 0.66% to Rs 710.10, after hitting high of Rs 744.90 on reports that it is eyeing a stake in US-based AriZona Beverages in which the Tatas have been interested for almost three years now. AriZona Beverages operates a portfolio of tea, coffee, water and juice brands, besides beer and snacks. Reportedly, if a bid goes through, the Tatas will keep both the bottled and powder beverage operations and may divest the beer and snack businesses of AriZona Beverages. The company however termed such report as speculative.

Public sector Hindustan Copper (HCL) jumped 5% to Rs 120.25 on recent reports that it may be revived without any cash support from the government. A financial restructuring package worth Rs 637 crore is proposed by the ministry of mines that includes waiver of loan, interest, preference share capital, guarantee fee and reduction of capital. The stock surged 5% in each of the previous three trading sessions.

Jai Corp hit 5% upper circuit at Rs 5314.75 on BSE on company’s plans to consider issue of bonus shares in a meeting scheduled on 09, August 2007. Jai Corp surged 62.8% over the last the past 10 trading sessions to Rs 5061.70 on 8 August 2007 from Rs 3107.60 on 25 July 2007.

Tata Power declined 2.70% to Rs 684 on reports that it is in talks with French nuclear group Areva for sourcing nuclear power equipment.

Ratnamani Metals & Tubes surged 1.75% to Rs 1040 after the company’s board approved the issue and allotment of 4,50,000 convertible warrants (5% of the present equity capital) at a price of Rs 950 per warrant aggregating to Rs 42.75 cores on preferential basis to promoters. The stock had surged 6% on Wednesday 8 August 2007 after the company made the announcement after trading hours on Tuesday, 7 August 2007.

Birla Kennametal was locked at the upper limit of 5% to Rs 225.15 after the company said it signed an agreement with its erstwhile joint venture partner US-based Kennametal to supply products for five years.

Asian markets eased from higher levels today, 9 August 2007. Nikkei (up 0.83% to 17,170.60), Taiwan Weighted (up 0.91% at 9,182.60) and South Korea's Seoul Composite (up 0.28% at 1,908.68) gained.

Hong Kong's Hang Seng lost 0.43% at 22,439.39. It came sharply off higher level.

Shanghai Composite advanced 1.95% to 4,754.09, after hitting an all time high of 4,768.88.

US stocks surged yesterday, 8 August 2007, as solid results in the technology arena and renewed demand for risky debt soothed investors a day after the Federal Reserve said the economy should keep expanding. The Dow Jones Industrial Average rose 153.56 points, or 1.14%, to 13,657.86. The Standard & Poor's 500 index rose 20.78 points, or 1.41%, to 1,497.49. The S&P has had its biggest three-day point gain since October 2002. The technology-dominated Nasdaq Composite index advanced 51.38 points, or 2.01%, to 2,612.98.

Crude prices continued to hover around the $72 mark on signs that US gasoline demand may have peaked as the summer driving season neared close. It was trading at $72.33, up $0.18, on the Nymex in early morning trade.