Bulls emerge victorious after three days of setback

Frenzied buying coupled with short covering after three straight day's of fall triggered a solid rally in late trade. Reports of Prime Minister's resignation had spooked a sell-off in mid-morning trade. Despite the rally, the market breadth remained negative. The market witnessed choppy swings throughtout the day. Global cues were mixed.

Earlier today, the market saw firm start despite weak global cues, but slipped in red shortly on fresh selling. The market breadth was weak. Shares from oil, realty, declined while those from IT, FMCG and power rallied.

The 30-share BSE Sensex ended up 254.93 points or 1.64% at 15,769.72. Sensex gained 300.01 points at its high of 15814.80 touched during late trade. It lost 200.72 points at day's low of 15,314.02, touched in mid-morning trade.

The BSE Sensex had eroded 900.78 points or 5.48% from 16,415.57 in past three trading days to 15,514.79 on 4 June 2008. Fears of early election, uncertainity over fuel price hike and weak global markets played the spoilsport.

The broader based S&P CNX Nifty was up 91.35 points or 1.99% to 4,676.95. Nifty June 2008 futures were at 4671, at a discount of 5.95 points as compared to spot closing.

The market breadth was negative on BSE with 1240 shares advancing as compared to 1397 that declined. 77 remained unchanged.

The BSE Mid-Cap index rose 0.05% to 6400.29 and BSE Small-Cap index rose 0.2% to 7,735.5961. Both these indices underperformed the Sensex.

BSE clocked a turnover of Rs 5578 crore today as compared to a turnover of Rs 6461.80 crore on 4 June 2008.

The NSE futures & options (F&O) segment turnover was Rs 51017.9 crore, which was higher than Rs 48,378.31 crore on Wednesday, 4 June 2008.

Among the sectoral indices on BSE, the BSE Consumer Durables index (down 1.42% to 4,031.72), BSE Realty index (down 0.99% at 6,326.05), BSE Auto (down 0.08% at 4,222.01), The BSE Oil & Gas index (up 0.02% to 10,061.83), BSE Capital Goods index (down 0.03% at 12,111.63), underperformed Sensex.

However the BSE IT index (up 5.01% to 4,617.44), BSE TecK index (up 3.45% to 3,525.65), BSE Power (up 2.89% to 2,708.49), BSE FMCG index (up 2.48% to 2,426.16), BSE Bankex (up 1.92% at 7,348.58), BSE Health Care index (up 1.9% at 4,345.89), BSE Metal index (up 1.89% to 15,714.59), BSE PSU index (up 1.84% to 6,719.54), outperformed the Sensex.

Among the 30-member Sensex pack, 22 advanced while the rest slipped.

IT stocks were the stars of the day's trading session, boosted by firm US dollar against Indian rupee. Wipro (up 6.25% to Rs 528.40), Satyam Computer Services (up 5.47% to Rs 512.20) and TCS (up 2.57% to Rs 982.75) edged higher.

India's second largest software services exporter Infosys jumped 5.86% to Rs 1979.70 on reports the firm is eyeing acquisitions in Europe to reaccelerate its growth. However the target company's name and size was not disclosed in the report.

Sahara Housing Finance Corporation was locked at 5% lower circuit filter at Rs 178 after the Reserve Bank of India banned a group financial firm Sahara India Financial Corporation from accepting public deposits after it was found guilty in violating various regulatory norms.

Mercator Lines soared 12.70% to Rs 118.50 after its Singapore-based unit bagged a renewed 4-year contract from Tata Power worth $320 million.

National Aluminium Company advanced 4.90% at Rs 501.75 on BSE on reports the firms plans massive investment of around Rs 40,000 crore in next five years in its various expansion projects.

Shares of upstream companies rallied after the subsidy burden that they have to bear became clear post fuel price hike announced yesterday, 4 June 2008, which had remained uncertain until now.

Oil and Natural Gas Corporation soared 7.46% to Rs 953.20 and Gail India jumped 7.39% to Rs 398.30.

Upstream oil companies ONGC and GAIL India absorb most of subsidy burden arising in the form of under-recoveries of oil marketing companies. The duo will now have to bear Rs 45,000 crore in subsidy burden, which is at historically high levels.

However the public sector oil-marketing companies extended losses today after yesterday’s fuel price hike. HPCL (down 6.26% to Rs 226.30), Indian Oil Corporation (down 6.29% to Rs 391.90) and BPCL (down 7.01% to Rs 301.35) edged lower.

Power stocks advanced on fresh buying. Tata Power Company (up 7.79% to Rs 1256.65), NTPC (up 5.57% to Rs 166.65), Reliance Infrastructure (up 5.68% to Rs 1130.85) edged higher.

FMCG stocks rose. Tata Tea (up 5.02% to Rs 816.30), Hindustan Unilever (up 3.23% to Rs 237.85), ITC (up 2.89% to Rs 222.35) edged higher.

Jaiprakash Associates (up 3.68% to Rs 205.60), Grasim Industries (up 3.19% to Rs 2,246.30), Tata Steel (up 3.1% to Rs 840.90), ICICI Bank (up 3.09% to Rs 781.25), HDFC Bank (up 2.22% to Rs 1,243), were the top gainers from Sensex pack.

Tata Motors (down 1.82% to Rs 532.60), Larsen & Toubro (down 1.6% to Rs 2,721.20), Ambuja Cements (down 1.89% to Rs 85.85), Reliance Industries (down 2.58% to Rs 2247.65), were the top losers from Sensex pack.

Interest rate sensitive realty sector declined on fears of hike in interest rates or CRR after inflation may rally to double-digit post fuel price hike announced yesterday, 4 June 2008.

Indiabulls Real Estate (down 1.6% to Rs 405.45), Phoenix Mills (down 3.99% to Rs 319) and DLF (down 3 % to Rs 538.45) edged lower from realty pack.

India’s largest maker of utility vehicles, Mahindra and Mahindra (M&M) declined 0.92% to Rs 562.75. It announced signing an agreement to acquire 100% stake in Italy based Engines Engineering. Engines Engineering is in the business of two wheels design and developing of motorcycle prototype.

India’s second largest telecom services provider Reliance Communications rose 1.3% to Rs 547.15. As per reports Reliance Communications and South Africa's MTN have begun due diligence as they inch closer to creating a global top-10 telecoms firm. Reliance Communications has also engaged Deutsche Bank for the possibility of roping in private equity firms for part of the deal, the source said. Blackstone Group Carlyle Group and Apax were interested to put in $4 billion to $5 billion, reports added.

India’s largest cement maker by sales ACC rose 1.09% to Rs 639.70. Its cement shipments in May 2008 fell to 1.8 million tonnes from 1.82 million tonnes a year earlier. Production fell to 1.79 million tonnes from 1.82 million tonnes during the similar period.

IFCI clocked the highest volume of 1.9 crore shares on BSE. Anu’s Laboratories (1.25 crore shares), Ispat Industries (1.21 crore shares), Chambal Fertilisers and Chemicals (1.14 crore shares) and Reliance Natural Resources (1.14 crore shares) are among other gainers in that order.

Reliance Industries clocked the highest turnover of Rs 418.91 crore on BSE. Anu’s Laboratories (Rs 353.59 crore), Reliance Capital (Rs 266.36 crore), Gokul Refoils and Solvent (Rs 210.66 crore) and ONGC(Rs 204.36 crore) are among other turnover toppers in that order.

India's largest wind turbine maker Suzlon Energy soared 8.66% to Rs 268.60. The stock moved up on reports that REpower Systems, in which Suzlon holds 33.6% stake, has bagged an order to supply 100 wind turbines to US-based enXco.

Tech Mahindra rose 7.52% to 847.85. The stock galloped after the firm said it signed a multi-million dollar deal with Botswana Telecommunications. The company sees revenues of upto $10 million over the next 3-5 years from the deal.

In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms. Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.

Meanwhile, the ruling Left Front in West Bengal has called a 12-hour general strike today, 5 June 2008 in protest against the 'anti-people' decision of the Centre to raise the prices of petrol, diesel and cooking gas.

Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets.

European markets were trading mixed. Key benchmark indices from France, and Germany were up between 0.08% to 0.11%. While UK's FTSE 100down 0.26%.

Asian markets were mixed today, 5 June 2008. Japan's Nikkei Singapore's Straits Times, South Korea's Seoul Composite, and China's Shanghai Composite, were down by between 0.08% to 0.65%. Hong Kong's Hang Seng and Taiwan's Taiwan Weighted were up between 0.55% to 1.28%.

US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade.

The Dow Jones industrial average slipped 12.37 points, or 0.10%, to 12,390.48. The Standard & Poor's 500 index was down 0.45 points, or 0.03%, to 1,377.20, while the Nasdaq advanced 22.66 points, or 0.91%, to 2,503.14.