Sensex retracts from two-month high, earns a handful of points

The market ended a shade higher today in volatile trade. Volatility worsened in the last one hour of trades due to the scheduled expiry of the April 2007 derivative contracts. Sensex heavyweights, Reliance Industries (RIL) and ICICI Bank, weakened in mid-afternoon trade, in contrast to their earlier firm trend.

The Sensex rose 11.11 points (0.08%), to end at 14,228.88. The S&P CNX Nifty rose 10.55 points (0.25%), to 4,177.85.

The market had pared gains shortly after surging in early trade, tracking an Asian rally. It had drifted further in afternoon trade. Later, a sell-off pulled the Sensex down 90.59 points, to 14,127.18, at 14:42 IST.

The Sensex had surged as many as 165.95 points, to 14,383.72, at the onset of trading, registering its highest level in more than two months, since 20 February 2007.

The Sensex fluctuated in a range of 256.54 points, between 14,127.18 and 14,383.72.

The market-breadth ended negative with 1,049 shares having advanced, 1,482 having declined, and 79 scrips unchanged.

The BSE clocked a turnover of Rs 4465 crore, much lower than Wednesday’s Rs 5198 crore.

Sectoral indices on BSE ended mixed. Some rose and some others declined. The capital goods index was the top-gainer, adding 89.06 points (0.91%), to 9,892.23. The auto index rose 37.08 points (0.75%), at 4,978.88. The healthcare index advanced 15.58 points (0.41%), at 3,847.10. The banking sector index, the bankex, rose 19.34 points (0.27%), to settle at 7,256.69.

The index for consumer durables was the top-loser. It eroded 33.90 points (0.9%), to 3,738.40. The metal index lost 62.06 points (0.62%), at 9,957.65. The IT index declined 3.08 points, at 4,958.64.

The small-cap and mid-cap indices edged lower. The BSE Small-Cap Index lost 57.69 points (0.82%), at 7,017.32, and the BSE Mid-Cap Index shed 17.30 points (0.3%), at 5,788.03.

Reliance Industries (RIL) dropped 0.6% to Rs 1590. The stock had gained as much as 1.5% in early trade, to a record high of Rs 1624.80. After trading hours, RIL reported 14% growth in net profit in Q4 March 2007 at Rs 2853 crore compared to Rs 2520 crore in Q4 March 2006, on the back of strong refining margins. The company said refining margins for the March 2007 quarter were $13 a barrel, higher than the benchmark Asian Dubai crack margin, which averaged less than $7 in the quarter.

ICICI Bank shed 0.5% to Rs 957, and was off the session’s high of Rs 994.30. As many as 3.4 lakh shares changed hands in the counter on BSE.

India's wholesale price inflation rate is forecast at 6.09% for the 12 months to 14 April 2007, unchanged from a week earlier. The data will be released around noon on Friday. The annual rate hit 6.69% on 27 January 2007, its highest in more than two years, but has moderated after the central bank tightened policy and the government cut duties on a range of items to rein in prices.

Grasim rose 2% to Rs 2495, in volatile trade. The stock had risen as much as 3.5% in early trade to Rs 2529, on the back of strong Q4 March 2007 numbers, which the company unveiled after trading hours on Wednesday. Grasim reported 80.5% growth in net profit in Q4 March 2007 at Rs 474.49 crore (Rs 262.74 crore). Net sales surged 36.2% to Rs 2493.75 crore (Rs 1829.78 crore).

Two-wheeler makers witnessed a divergent trend. Bajaj Auto rose 2.5% to Rs 2499, whereas Hero Honda dropped 1.3% to Rs 678.

ONGC dropped 2.3% to Rs 950, on profit-taking, after a recent surge. Ditto for Tata Steel. The stock was down 2% to Rs 559.10.

Some IT pivotals shrugged off the rupee’s surge. Wipro gained 1.4% to Rs 563.90 and TCS rose 1.4% to Rs 1239. i-flex gained 3% to Rs 2475. A stronger rupee directly impacts the revenue and profits of IT firms, as they derive a lion’s share of revenue from exports.

The Indian rupee rose as high as 40.71 per dollar on Thursday, as investors shrugged off worries about official steps to limit further gains in Asia's best-performing currency this year. It rallied past 41 on Wednesday for the first time in nine years. The rupee rose 8.4% against the dollar this year, including an increase of about 3% in the past week.

Refinery shares were in demand. HPCL rose 3.6% to Rs 271.85, Indian Oil Corporation gained 4.3% to Rs 431 and BPCL advanced 2.9% to Rs 338.10.

ABB rose 1.3% to Rs 4095, on the back of robust Q1 results. The company today reported 69% growth in net profit for Q1 March 2007 at Rs 86.63 crore (Rs 51.30 crore).

Siemens extended Wednesday’s post results rally. The stock surged 3% to Rs 1152.

Motor Industries Company (MICO) gained 1.3% to Rs 3405, after the company today reported 60% jump in net profit in the March 2007 quarter at Rs 183.80 crore from Rs 114.91 crore in the March 2006 quarter. Net sales rose 18.2% to Rs 1070.11 crore from Rs 905.16 crore.

Soda ash and textiles firm GHCL fell by its maximum daily limit of 10% to Rs 165.15, after market regulator Securities & Exchange Board of India (Sebi) barred some promoter group firms from dealing in shares due to abnormal dealings between November 2006 and March 2007. This is the first ever order based on an alert thrown up by Sebi’s recently instituted Integrated Market Surveillance System (IMSS).

Tata Tea rose 2.5% to Rs 793. Tata Tea said on Thursday its subsidiary, the Tetley Group, had agreed to buy the Vitax and Flosana trademarks in Poland from Premium Foods for an undisclosed sum. The combined turnover of Vitax and Flosana brands is $23 million, Tata Tea said in a statement. Vitax is a brand of specialty tea.

PSL jumped 8% to Rs 223, after it received orders aggregating Rs 1045 crore in April 2007, for onshore as well as offshore projects.

Eicher Motors lost 5% to Rs 260.55, after the commercial vehicles maker said it had acquired US-based Hoff and Associates and its two Chinese subsidiaries for $3.5 million.

Real estate developer Akruti Nirman dropped nearly 2% to Rs 389. The company on Thursday posted a net profit of Rs 57.18 crore on net sales of Rs 92.68 crore for the March 2007 quarter.

Kakatiya Cement Sugar & Industries jumped 10% to Rs 83.50. The company today reported a marginal growth in net profit in the March 2007 quarter at Rs 8.31 crore from Rs 8.27 crore in the March 2006 quarter.

Bilpower rose nearly 2% to Rs 187.70, after it reported a surge in net profit in the March 2007 quarter at Rs 7.75 crore (Rs 2.35 crore). Net sales surged to Rs 78.51 crore from Rs 41.19 crore.

Liberty Shoes dropped 4.5% to Rs 146. The company today reported 23% fall in net profit in the March 2007 quarter at Rs 4.48 crore (Rs 5.80 crore). Net Sales rose to Rs 67.01 crore from Rs 57.67 crore.

Software firm 3i Infotech rose nearly 3% to Rs 292.70, after it announced a 1-for-1 bonus issue and along with 82% rise in net profit in the March 2007 quarter.

Opto Circuits (India) rose 1.2% to Rs 334.05. The company said on Thursday it had agreed to buy two medical equipment firms in India. The companies -- Devon Innovations and Ormed Medical Technology -- make products such as catheters and dilator sets used in urology, gastroenterology and orthopaedics, Opto said in a statement.

Hotel Leelaventures dropped 0.3% to Rs 56.40. The company has reportedly paid a whopping Rs 200 per acre for a 3-acre plot in the heart of Delhi.

Idea Cellular dropped 1% to Rs 116.30. The company on Wednesday reported robust financial performance for FY 2007 (year ended 31 March 2007). Its consolidated net profit surged 137.6% to Rs 503.26 crore from Rs 211.77 crore in FY 2006. Revenue rose 47.5% to Rs 4412.93 crore (Rs 2989.88 crore).

Financial services firm Cholamandalam DBS Finance jumped 10% to Rs 115.05, after its net profit in the March 2007 quarter more-than- trebled to Rs 15.49 crore. Net sales also jumped to Rs 160 crore.

Nicholas Piramal dropped 0.3% to Rs 249.The company today reported a surge in net profit in the March 2007 quarter at Rs 54.95 crore from Rs 15.17 crore in the March 2006 quarter. Total income surged to Rs 645.21 crore from Rs 433.16 crore.

Sakthi Sugars dropped 3% to Rs 89.05, after reporting a sharp 73.5% fall in net profit in the March 2007 quarter at Rs 9.06 crore from Rs 34.16 crore in the March 2006 quarter. Net sales declined to Rs 206.24 crore from Rs 239.14 crore.

Suven Life Sciences ended flat at Rs 43.20. The company today reported 24% growth in net profit in the March 2007 quarter at Rs 2.81 crore (Rs 2.26 crore). Revenue surged to Rs 28.73 crore from Rs 19.56 crore.

The market received a boost early this week, when in its monetary policy announced Tuesday, the Reserve Bank of India (RBI) kept all policy rates unchanged. The 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. RBI's forecast of GDP growth at 8.5% in the fiscal year ending March 2008, is lower than the 9.2% expected for 2006/07.

Corporate results announced so far, have been strong. After trading hours today, RIL reported Q4 results that beat market expectations.

The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over in early-May 2007,. and the vote is seen as a barometer of national political trends.

FIIs have pumped money heavily into Indian stocks, this month. Their inflow picked up after IT major Infosys on 13 April 2007, issued a strong guidance for FY 2008, putting to rest concerns of a US economic slowdown on the IT sector. FII inflow for April 2007 (till 25 April) reached Rs 6514.20 crore. FIIs had pulled out a net Rs 1082 crore in March 2007.

Corporate results, FII inflow, RBI’s pause on rate hike and firm global markets helped the Sensex gain 1773.51 points (14.2% from a low of 12,455.37 on 2 April 2007. The Sensex had tanked 617 points in a single trading session on 2 April 2007, following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007.

The major March 2007 quarter results tomorrow are that of Bharti Airtel and Ranbaxy Laboratories

Next week is a curtailed trading week as the market remains closed for two days in a row on Tuesday (1 May) and Wednesday (2 May) on account of a public holiday.