IT shares lead fall

The market saw trend reversal from initial firmness to end in the red. The sentiment turned nervous ahead of a key meeting of the government with left parties on the Indo-US nuclear deal. The market had opened on an upbeat note tracking steady global markets. A bout of volatility was witnessed in the second half of the day’s trading. Domestic market underperformed its global peers today.

The BSE 30-share Sensex shed 54.06 points or 0.35% at 15,542.77. It opened higher at 15,668.40 and advanced further to hit a high of 15,698.98. The index touched a low of 15,506.10.

At the day's low of 15,506.10, the Sensex had lost 90.73 points for the day. At the day’s high, the Sensex had gained 102.15 points for the day. It oscillated in a band of 192.88 points for the day.

The BSE Sensex is 326.08 points away from its all time high of 15,868.85 hit on 24 July 2007.

The S&P CNX Nifty was down 10.80 points or 0.24% at 4,497.05. The Nifty September 2007 futures settled at 4488.20, a discount of 8.85 points as compare to spot closing.

The panel set up by the government to look into the Left Front's concerns over the Indo-US nuclear deal is holding its first meeting today, 11 September 2007. While the operationalisation of the deal has been put on hold pending the findings of the panel, it cannot be stalled forever. A flashpoint may come sooner or later.

The four Communist parties have 60 members of parliament (MPs) in the 545-member lower house of parliament. Prime Minister Manmohan Singh's government could fall or be reduced to a minority if the Left withdraws support.

Yet, analysts reckon that political turmoil arising from nuke deal will not impact India’s basic economic fundamentals though some infrastructure projects may get delayed. India’s economy is expected to post strong growth for a long period of time mainly due to favourable demographics.

The market breadth was positive on BSE, with 1,410 shares advancing as compared to 1,356 that declined, while 65 remained unchanged. The breadth was much stronger in morning trade when 1231 shares had risen, 241 had declined and 30 were unchanged.

The BSE Mid-Cap index slipped 0.13% to 6,875.74, while the BSE Small-Cap index gained 0.17% to 8,529.09. Both these indices outperformed the Sensex.

The BSE Mid-Cap index hit an all-time high of 6,950.58, and the BSE Small-Cap index struck a lifetime high of 8,610.97 earlier during the day.

Sectoral indices on BSE displayed mixed trend. The BSE Oil and Gas Index (up 0.01% at 8,260.71), BSE Consumer Durables index (up 0.21% to 4,557.89), BSE Realty index (up 0.01% to 7,531.79), BSE PSU index (up 0.56% to 7,368.52), BSE Metal Index (up 1.43% at 11,772.22), BSE Capital Goods Index (up 0.44% at 13,714.26) and BSE FMCG Index (up 0.62% at 2,098.05) outperformed the Sensex.

However, the BSE Auto Index (down 0.67% at 4,867.41), BSE Bankex (down 0.77% at 8,038.07), BSE Health Care Index (down 0.46% at 3,703.82), BSE TecK index (down 1.41% to 3,554.38), and BSE IT Index (down 2.19% at 4,470.56) were underperformers.

The total turnover on BSE amounted to Rs 4935 crore as compared to Rs 4047 crore on Monday, 10 September 2007. The NSE F&O turnover was Rs 41739.52 crore as compared to Rs 37333.48 crore on Monday, 10 September 2007.

From 30-member Sensex pack, 20 declined while the rest gained.

IT pivotals edged lower for the second day in a row today after data released on Friday, 7 September 2007, showed US payrolls shrank in August 2007 for the first time in four years, raising fears that the world's largest economy was headed into a recession.

India’s third largest software services exporter Wipro was the top loser from the Sensex pack. It slipped 2.44% to Rs 455.550 on 1.86 lakh shares.

Other IT pivotals Satyam Computers (down 2.32% to Rs 432), Infosys Technologies (down 2.33% to Rs 1828), and TCS (down 2% to Rs 1026) also declined. IT companies derive over 50% of their revenue from exports from the US markets

The Indian rupee was trading slightly firm at 40.60 against the US dollar. It had settled at 40.65/66 yesterday, 10 September 2007.

The BSE IT index lost 4.22% to 4,570.89 to 10 September 2007 from its close of 4,774.13 on 10 August 2007.

Auto stocks declined on profit booking. Tata Motors (down 1.54% to Rs 691.85), Maruti Udyog (down 1.96% to Rs 859.10), and Mahindra & Mahindra (down 0.73% to Rs 696.10) dipped.

NTPC, the nation's top power generation company in terms of revenue, advanced 2.30% to Rs 195.50 on 17.20 lakh shares. It struck an all time high of Rs 197.50 in intra-day trade. It was the top gainer from the Sensex pack. As per reports, the power ministry has sought waiver of new external commercial borrowings (ECB) norms for the power sector to allow it to use funds raised abroad for rupee expenditure.

India’s largest dedicated mortgage finance firm by revenue Housing Development Corporation (HDFC) advanced 1.98% to Rs 2145.10. HDFC struck an all-time high of Rs 2153 in intra-day trade.

World’s sixth largest steel producer in terms of total steel production Tata Steel gained 2.16% to Rs 708 on reports that it is looking at building a 5-million tonne steel plant in South Africa.

Engineering companies Larsen & Toubro (up 0.48% to Rs 2590.10) and Bhel (up 1.22% to Rs 1912) were the other gainers from the Sensex pack

India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) slipped from an all-time high of Rs 2007 struck in early trade. It declined 0.34% to Rs 1980.40 on 6 lakh shares.

As per reports, RIL has warned that fresh bidding for the price of natural gas produced from the Krishna Godavari’s-D6 fields could lead to market distortion and cartelisation. RIL claims that the bidding process followed by RIL (that discovered the gas price of $4.33 per million British thermal unit) was a transparent and legally-complete process in line with the provisions of the production sharing contract with the government.

Among side counters, Gulf Oil Corporation (up 17.28% to Rs 1275), Neyveli Lignite Corporation (up 10.09% to Rs 93.25), CCL Products (up 11.74% to Rs 264.05), Birla Kennametal (up 10% to Rs 299.95), and Zenith Birla (up 20% to Rs 42.40) surged.

SEL Manufacturing (down 5.60% to Rs 135.70), JRG Securities (down 6.64% to Rs 53), Bombay Burmah Trading Corporation (down 5.77% to Rs 525), Manugraph Industries (down 4.68% to Rs 123.25), and Emkay Shares & Stock Brokers (down 8.04% to Rs 142.40) slipped.

Motilal Oswal Financial Services settled at Rs 977.45 on the BSE, a premium of 18.47% over IPO price of Rs 825. On BSE, 37.19 lakh shares of the scrip were traded. The scrip had debuted at Rs 999 on BSE. It also hit a high and low of Rs 999 and Rs 913 respectively. The IPO of Motilal Oswal Financial Services had ended on 20 August 2007 with 27.41 times subscription.

Jindal Steel & Power jumped 4.87% to Rs 4150 on reports that the Bolivian parliament had approved a joint venture with the Indian company to develop iron ore mines and set up a steel plant in the country. The Bolivian government is also exploring ways and means to disburse an initial funding for the joint venture (JV) company, Empresa Siderurgica del Mutun.

IFCI rose 4.37% to Rs 77.70 on reports that US-based private equity group Blackstone is likely to join the race to acquire a 26% stake in the firm. Reportedly, Blackstone could come in as a standalone strategic investor or as the lead partner in a consortium.

Nitco Tiles gained 4.05% to Rs 238.90 on reports that firm has forayed into import and distribution of cement and is importing 1 million tonnes (MT) of cement from Pakistan. Nitco is importing through the MMTC, the nodal agency for importing cement from foreign companies, reports suggest.

Rallis India advanced 3.08% to Rs 325 on reports of that it is in the race to acquire the world’s largest privately held crop protection and life sciences firm, Arysta LifeScience Corporation, from private equity firm Olympus Capital Holdings.

United Phosphorus, which is also in the race to acquire Arysta LifeScience Corporation gained 1.81% to Rs 345. These two Indian companies are among the six contenders for the Tokyo-based firm, reports suggest. The acquisition is expected to cost nearly $2 billion (Rs 8,200 crore), or nearly double Arysta's turnover of 124.1 billion yen (Rs 4,400 crore) last year. Arysta is a leading crop protection and life sciences firm.

Shipping Corporation of India rose 2.20% to Rs 197.10 after Baltic Exchange's dry freight index, gauging the strength of the seaborne dry commodities trade, set a record for a fourth consecutive week on Monday, 10 September 2007, on surging raw materials demand and port congestion.

Modern Dairies jumped 5% at Rs 150.90 ahead of its record date for issuing bonus shares. Modern Dairies has fixed 1 October 2007 as record date for issuing bonus shares, in the ratio of 1:1 (1 bonus share for every 1 equity share held).

Blue Dart Express jumped 2.49% to Rs 622 on it plans to invest about Rs 1000 crore in the short- to medium-term to expand its air infrastructure. The company will expand its aircraft fleet, add material handling equipment and ramp up ground handling facilities.

Private equity firm IL&FS Investment Managers rose 3.87% to Rs 174.25 after the company said after market hours on Monday, 10 September 2007, it has tied up with Milestone Capital Advisors to raise up to Rs 1000 crore through a real-estate fund.

Idea Cellular rose 0.61% to Rs 123.20 after its board approved a proposal to spin off its telecom towers business into a subsidiary.

Nagarjuna Construction Company rose 2.20% to Rs 219.75 after the company during trading hours today, 11 September 2007, announced it had bagged new orders totaling Rs 272 crore.

Cairn India, a unit of Cairn Energy Plc, rose 0.80% to Rs 158 after the company said during trading hours today, 11 September 2007, it had received approval from the Indian government granting access to land for building a pipeline from Rajasthan state.

Jaiprakash Hydro-Power slipped 3.41% to Rs 49.50 after the National Stock Exchange of India (NSE) barred further F&O positions in the underlying as 95% of market wide limit was reached yesterday, 10 September 2007. Market-wide position limit for derivative contracts is the lower of 30 times the average number of shares traded daily, during the previous calendar month, in the relevant underlying security in the underlying segment (cash market segment) or 10% of the number of shares held by non-promoters in the relevant underlying security.

Moser Baer (India) gained 1.49% to Rs 308.95 after it announced its foray in computer peripherals market with the launch of its optical disk drive (ODD), a combo drive and DVD writer.

All the European markets, which opened after the Indian markets, were trading higher. Key benchmark indices in London (up 1.52% to 6,227.60), Germany (up 1.12% to 7,458.35) and France (up 1.47% to 5,465.61) edged higher.

Asian markets settled mixed today, 11 September 2007. Japan's Nikkei (up 0.71% at 15,877.67), Taiwan's Taiwan Weighted (up 0.73% at 9,003.12) and Singapore's Straits Times (up 1.53% points at 3,494.57) gained.

However, Shanghai Composite (down 4.51% to 5,113.96) and Hang Seng (down 0.20% at 23,9522.24), slipped.

US shares finished a volatile session with small gains yesterday, 10 September 2007 as investors grappled with the possibility that the Federal Reserve might not lower interest rates as much as they hope. The Dow Jones industrial average rose 14.47 points, or 0.11%, to 13,127.85. Broader stock indexes fell. The Standard & Poor's 500 index slipped 1.85 points, or 0.13%, to 1,451.70, and the Nasdaq Composite index declined 6.59 points, or 0.26%, to 2,559.11.

Crude oil prices surged to near a record high on Tuesday, 11 September 2007, after attacks on oil and natural gas pipelines rocked the world's fifth largest crude producer Mexico, ahead of an OPEC meeting to determine production policy. US light crude rose 40 cents to $77.89 a barrel and is now near its record high of $78.77 hit on 1 August 2007. London Brent crude rose 36 cents to $75.84