Five-day rally halts

The market ended its five-day winning streak, as selling pressure emerged in later half of the day’s trading session. However the losses were marginal. While metal and capital goods stocks lifted the markets, banking and IT shares pulled it lower.

The 30-shares BSE Sensex settled 6.30 points or 0.05% lower at 13183.24. It opened higher at 13221.76, and struck a fresh intra-day high of 13,294.90, a little while ago, as buying intensified. Its low for the day was at 13,161.21, touched in late afternoon session of trades. Prior to today’s trading session, the Sensex had advanced from 12455.37 on 2 April to 13189.54 on 10 April.

However, the S&P CNX Nifty gained 14.50 points or 0.38% to finish at 3862.65

Even as the market was flat, there was lot of action outside the index stocks, whoch was reflected in strong market-breadth on BSE. There were close to 1.5 gainers for every loser. Against 1,548 shares advancing on BSE, 1027 declined, while 72 remained unchanged. The BSE Mid-Cap Index ended at 5,517.06 up 55.55 points or 1.02%, while the BSE Small-Cap Index gained 54.77 points or 0.82% at 6,711.51

The total turnover on BSE amounted to Rs 3943.40 crore while the total market wide turnover was at Rs 34797.55 crore as compared to Rs 34669.31 crore on Tuesday

Among the Sensex pack, 16 declined while the rest advanced

Shares from the metal pack were stars of the day’s trading session. The BSE Metal Index closed at 9,330.87 up 3.68%, following steady rise in LME prices. Copper futures for three months delivery were up 2% today at $7910 a tonne on LME, a seven-month high. Base metals had recorded an across the board rise on Tuesday (10 April).

The ongoing rise in copper prices is due to falling inventories, strong demand from China and last week’s strong US job data. Copper inventories declined by 2100 tonnes to stand at 175500 tonnes today, shedding 15% in the last one month on strong demand for the red metal from China. The inventories of all base metals except lead dipped today.

Aluminum and copper major Hindalco Industries jumped 5% to Rs 143, on high volumes of 16.88 lakh shares and was the top gainer.

India’s largest private sector steel manufacturer Tata Steel followed with gain of 3.42% to Rs 512.50 on high volumes of 26.01 lakh shares. It had surged to a high of Rs 519. There are reports that it is likely to launch a rights issue of nearly Rs 3,500 crore to part-finance its $12.15 billion acquisition of Anglo-Dutch steelmaker Corus Group, payment for which is to be made today. The issue may be priced at around Rs 400 a share. The Tata Steel stock advanced close to 17% in the past one week, anticipating such a move from the company. If approved, this will be the third rights issue by Tata Steel in the last 22 years. The company issued 1:3 rights offer in 1988 and 2:5 offer in 1993.

Nalco (up 6.86%), Sterlite Industries (up 6%), SAIL (up 4.20%), Hindustan Zinc (up 3.54%) and Jindal Steel & Power (up 4.73%) higher.

Welspun Guj Stahl Rhoren jumped 12.22% to Rs 117, after reports that it is gearing up to bid for pipeline projects in Saudi Arabia, Iran and Indonesia. Reports also suggest the company is expected to win more orders from the US.

Shares from the capital goods advanced in anticipation of robust set of results for March quarter. The BSE Capital Goods Index was up 1.1% at 9,342.38. Gammon India (up 6.52%), Thermax (up 3.6%), Alstom Projects (up 2.75%), Bhel (up 1.33%) and Suzlon Energy (up 7.10%).

Bharti Airtel (up 1.43% to Rs 775), and Cipla (up 1.20% to Rs 236.20), were the other gainers.

IT bellwether Infosys Technologies was down 0.41% to Rs 1190, after striking a high of Rs 2038, ahead of its Q4 March 2007 results, due on Friday, 13 April 2007. Infosys’ FY 2008 guidance will be the next major trigger for the market. The rupee’s sharp surge in late-March 2007 - early April 2007, uncertain US economic outlook and certain client-specific risks, have raised concerns that the FY 2008 guidance by Infosys Technologies may turn out conservative. Infosys unveils the full year guidance at the beginning of the financial year along with Q4 March 2007 results, on Friday, 13 April 2007.

For Q4 March 2007, Infosys has given a guidance of income to be in the range of Rs 3789 crore and Rs 3798 crore; indicating a Y-o-Y growth of 44.4% - 44.7%. The EPS is expected to be Rs 17.88; showing Y-o-Y growth of 46.3%.

For the full year ending March 2007, Infosys’ income is expected to be in the range of Rs 13,910 crore and Rs 13,919 crore; Y-o-Y growth of 46.1% - 46.2%. EPS before exceptional items is expected to be Rs 66.63, a Y-o-Y growth of 48%.

Since 2001, when the practice of coming out with a guidance started, Infosys has disappointed every alternate year on its guidance. And in five of the last six times, Infosys' stock and the broader market have fallen on results day (or in the first trading session after results, in case the markets were closed) - no matter what the guidance was.

The sole exception was 14 April 2006, when Infosys beat street estimates by guiding revenue growth of 30.7% and EPS growth of 28.4% for the just-past financial year. But on that Friday, markets were shut due to Ambedkar Jayanti. When they opened on Monday, 17 April 2007, the Infosys stock zoomed 6.93%, and the Sensex ended with a gain of 302 points (2.69%).

Other IT stocks were not spared either. Satyam Computers (down 0.34%), TCS (down 0.41%) and Wipro (down 0.23%) slipped. The BSE IT Index was down 0.4% at 4,808.08.

Overall Q4 results are expected to be strong. More important that Q4 results is what the company managements say about the outlook for the current financial year (FY 2008). Citigroup expects overall corporate earnings growth to moderate to 15-16 percent in the current and next year, while FY 2007 (year ended 31 March 2007) could be the fifth straight year of 25-30 percent earnings growth.

Index heavyweight Reliance Industries (RIL) was up 0.38% to Rs 1387.05 on 4.42 lakh shares. It advanced to a high of Rs 1398.

Pharma shares witnessed selling pressure. Ranbaxy Laboratories lost 4.02% to Rs 343.40, and was the top loser. Dr Reddy’s declined 2.76% to Rs 700.

Cement stocks witnessed renewed selling, on reports that first cement cargo from Pakistan has arrived at Rs 155 per bag as against Rs 225-240 price in domestic market. Government official says price import prices now gone up to Rs 165 per bag on high demand. Cement release will take around 28 days as BIS approval is needed. ACC (down 2.08%), Gujarat Ambuja Cements (down 2.29%), and Grasim (down 0.70%), declined.

FMCG major HLL slipped 1.77% to Rs 205.15 on 8.44 lakh shares. It slipped from a high of Rs 209.75

The BSE Bankex was down 0.7% at 6,552.92. UTI Bank (down 4.69%), Kotak Mahindra Bank (down 2.46%), Bank of India (down 1.97%), Union Bank of India (down 1.41%) SBI (down 0.99%), and HDFC Bank (down 1.19%), slipped.

Gremach Infrastructure Equipments & Projects settled at Rs 83.95, a discount over IPO price of Rs 86. Earlier today, the stock debuted at Rs 92 on BSE. It hit a low of Rs 80.70 and high of Rs 100. The counter saw high volumes of 1.03 crore shares on BSE. The company had priced its IPO at the higher end of the revised price band of Rs 72 to Rs 86 per share.

iGate Global Solutions (iGATE) slipped 4.83% to Rs 383.10, after striking a high of Rs 422, after it reported revenue of Rs 805.1 crore for the year ended March 2007 as against Rs 635.8 crore in the previous year. Net profit for FY07 increased to Rs 49.8 crore, a sharp spurt of 805.5% from Rs 5.50 crore in FY06. For the fourth quarter ended March 2007, the company’s revenues increased 25.50% to Rs 210.1 crore compared to Rs 167.4 crore in the corresponding quarter previous year. While net profit for Q4 FY07 surged 381% to Rs 22.6 crore from Rs 4.7 crore in Q4 FY06.

However, operating revenue for the quarter was adversely impacted by 2.1% due to the strengthening of the rupee against the US Dollar. During the recently concluded quarter, iGATE added six new clients largely for IT services.

India’s largest airline by marketshare, Jet Airways slumped 5.79% to Rs 607.50, after reports that it has decided to go ahead with the deal to buy out Air Sahara. The rapprochement comes in the middle of acrimonious arbitration proceedings, after Jet Airways walked out of an agreement to acquire Sahara in June last year. The transaction will now be completed in accordance with the original share purchase agreement, except for a $50 million discount in the enterprise value, reports indicated. After accounting for earlier payments and debt, Jet will now pay about Rs 950 crore for Air Sahara. Of this, about Rs 400 crore will be made in cash immediately and the remaining will be paid in four instalments.

Geometric Software jumped 16.2% to Rs 119.30 on renewed buying on expectation of strong Q4 March 2007 results.

Newspaper publisher Deccan Chronicle Holdings jumped 10% to Rs 163.55 after the company said it planned to raise advertisement tariff by 30% with effect from May 2007 across segments.

Dewan Housing Finance Corporation gained 2.56% to Rs 62.2 after the mortgage lender increased interest rates on home loans by 125 basis points with effect from 1 April 2007.

Elecon Engineering Company gained 6.63% to Rs 412 after the company said it has bagged a contract worth Rs 229.09 crore from NTPC for supply and installation of coal handling plant package for National Capital Termal Power Project (NCTPP), Dadri, Stage II from NTPC.

The Nikkei share average closed little changed on Wednesday as investors sold shares of Fanuc Ltd. and other machine makers following downbeat machinery orders data, offsetting gains in property and other domestic demand-related stocks. The Nikkei closed up 0.03% or 5.38 points at 17,670.07.

Hang Seng was up 0.50% or 101.56 points to 20449.43

US stocks edged higher on Tuesday (10 April) as a rebound in oil prices lifted energy shares and Citigroup gained on expectations of big job cuts. The Dow Jones industrial average rose 4.71 points, or 0.04 percent, to end at 12,573.85. The Standard & Poor's 500 Index gained 3.78 points, or 0.26 percent, to 1,448.39. The Nasdaq Composite Index advanced 8.43 points, or 0.34 percent, to 2,477.61.

FIIs have resumed buying ahead of the corporate earnings season. They were net buyers to the tune of Rs 569.40 crore on Monday (9 April), the day when Sensex had surged 322 points on firm global bourses. They were net buyers to the tune of Rs 567.50 crore on 5 April. As per provisional data, FIIs were net buyers to the tune of Rs 350 crore on Tuesday 10 April, the day when Sensex had gained 12 points.

FIIs were net buyers to the tune of Rs 114 crore in index-based futures on Tuesday. They were net buyers to the tune of Rs 60 crore in individual stock futures on that day.

Oil prices steadied on Wednesday after gains on Tuesday as investors turned attention to Iran's nuclear activities and dwindling gasoline stocks in the United States, the top consumer. US crude for May delivery was down 2 cents at $61.87 a barrel