Sensex pulls off a coup towards the end

The BSE Sensex abandoned the weak trend during the first half of trading, towards the later part of the day. The late burst is attributed to index heavyweight, Reliance Industries, which had surged to an all time high of Rs 1605.15. A possibility of short-covering ahead of expiry of the April contracts could also cannot be ruled out. Profound interest for index pivotals from auto, pharma as well as select other blue-chips kept the Sensex going.

The 30-share BSE Sensex advanced 91.70 points, at 14,228.42, as per a provisional closing. It had opened firm, at 14,141.70, and had advanced to a high of 14,238.29. Its low for the day was 14,052.17.

Most of the gains came on the back of volatility, which is expected to remain high ahead of Thursday (26 April 2007)'s expiry of the April 2007 derivative contracts.

The Sensex had been weak since the opening, after a strong previous session (24 April 2007), when it had surged a steep 208 points, following the Reserve Bank of India (RBI’s) decision to keep key rates unchanged at its monetary policy meeting.

The market-breadth, which indicates the overall health of the market, was strong indicating buying interest for smallcap and midcap stocks. On BSE 1,468 scrips advanced compared to 1,081 that declined. A total of 88 scrips remained unchanged.

The total turnover on BSE amounted to a healthy Rs 5175 crore, boosted by two huge block deals of 12.50 lakh shares each, at an average Rs 1209 per share in early trade, in the TCS counter. The stock was down 0.15% to Rs 1224, on total volumes of 27.27 lakh shares. Undoubtedly, it was the top-traded counter on BSE with a turnover of Rs 330 crore.

Among the 30-Sensex pack, 19 advanced while the rest declined.

Pharma major Ranbaxy Laboratories was the top-gainer, up 5.93% to Rs 369.85, on a volume of 7.91 lakh shares. The company said on Wednesday that it had been granted a 180-day market exclusivity in the US for the 80-mg dosage of the drug pravastatin sodium tablets, which is used to treat cardiac diseases. The 80-mg tablet had annual sales of $209 million, while the market for all dosages of the drug was $1.19 billion a year, Ranbaxy said in a statement. Pravastatin is the generic version of Bristol-Myers Squibb's cholesterol-fighter Pravachol.

Other pharma stocks Cipla (up 5.12% to Rs 251.55) and Dr Reddy’s (up 0.85% to Rs 720) also gained.

Auto stocks Tata Motors (up 2.36% to Rs 760) and Hero Honda (up 3.93% to Rs 687) gained on renewed buying.

HDFC Bank rose 1.62% to Rs 1030, on reporting 30.5% growth in net profit for Q4 March 2007.

The private sector bank posted a net profit of Rs 343.57 crore in the quarter ended 31 March 2007, against Rs 263.21 crore for the March 2006 quarter. Total Income increased to Rs 2384.19 crore compared with Rs 1682.65 crore in the March 2006 quarter.

Index heavyweight Reliance Industries (RIL) advanced 1.11% to Rs 1598, on a volume of 8.69 lakh shares. It had recovered from a low of Rs 1560, and had surged to a high of Rs 1605.15.

IT stocks came under selling pressure. Infosys Technologies lost 1.85% to Rs 2020 and was the top loser.

Satyam Computer dropped 1.67% to Rs 467, on a volume of 10.93 lakh shares. All these pivotals had lost 0.45 - 2.2% on Tuesday (24 April) as well, due to the rupee’s surge, and in the face of a strong rally in the market.

The Indian rupee rose to a fresh nine-year high on Wednesday, as investors bet on continued capital inflows into the country, and also on the central bank not intervening to check the gains. At 9:02 IST the rupee was at 41 per dollar, its strongest since May 1998. It had ended at 41.10/12 on Tuesday.

The rupee’s surge is a cause of concern for IT firms, as it directly impacts their revenue and profits, a lion’s share of which is accounted for by exports.

Private sector steelmaker Tata Steel was down 1.31% to Rs 571.50, on 18.48 lakh shares.

Bharti Airtel (down 1.33% to Rs 862), NTPC (down 1% to Rs 156.80) and L&T (down 1.20% to Rs 1683) slipped.

The Nikkei 225 Index was down 1.24%, while the Hang Seng Index lost 0.18%.

FII inflow will dictate the trend. After a heavy inflow of the past few days, FIIs turned sellers on Monday (23 April 2007). They were net sellers to the tune of Rs 68.50 crore on that day. Their inflow for April 2007 (till 23 April) reached Rs 5051.20 crore.

As per provisional data, FIIs were net buyers to the tune of Rs 340 crore on Tuesday (24 April 2007), the day when the Sensex had surged 208 points following the central bank's decision to hold rates steady. Domestic institutional investors were net buyers to the tune of Rs 184 crore on Tuesday.

In its monetary policy announced Tuesday, RBI forecast that annual wholesale price inflation, which was running just above 6% in early April 2007, will be close to 5% at end-March 2008. The RBI forecast GDP growth at 8.5% in the fiscal year ending March 2008, lower than the 9.2% expected for 2006/07.

The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The UP vote is seen as a barometer of national political trends.

The Dow Jones industrial average rose on Tuesday, as IBM boosted its dividend by a third and as companies such as DuPont Co posted strong earnings. But weak economic data weighed on the broader market and tempered the Dow's late surge toward the 13,000 milestone.

The Dow hit an intraday record of 12,989.86, but pared gains in the last hour of trade. It ended up 34.54 points, or 0.27%, at 12,953.94. The Standard & Poor's 500 Index slipped 0.52 points, or 0.04%, to close at 1,480.41. The Nasdaq Composite Index ended up 0.87 point, or 0.03%, at 2,524.54.

Oil prices were little changed on Wednesday ahead of the release of a weekly US petroleum supply snapshot, which is expected to show domestic gasoline stocks rose.

Light, sweet crude for June delivery rose just 6 cents in Asian electronic trading on the New York Mercantile Exchange by midmorning in Singapore. The contract on Tuesday fell $1.31 to settle at $64.58 a barrel.

Nymex crude oil rose $1.78 to $65.89 a barrel on Monday, on fears that escalating violence after a presidential election in Nigeria, which is Africa's largest producer and a main oil supplier to the United States, interrupted supplies.