The Sensex was extremely volatile throughout the day, as bulls and bears locked horns, with the latter emerging victorious. The benchmark has, over the past few days, found it difficult to stay abreast of the 14,000 milestone. Despite a strong show in the first half, the Sensex lost its way in the second half. Heavy selling brought about the downfall, led by fresh selling of IT pivotals.
The 30-share BSE Sensex lost 55.02 points (0.39%), to end at 13,879.25. It had opened with an upward gap, at 14,044.71, buoyed by strong demand for index pivotals, especially for Reliance Industries (RIL), with firm Asian markets providing the initial thrust. The benchmark Sensex also advanced to a high of 14,067.07, its low for the day being 13,861.38.
The S&P CNX Nifty lost 6.20 points (0.15%), to 4,111.15.
The total turnover on BSE amounted to Rs 4481.98 crore, while the total NSE F&O turnover amounted to Rs 22526.7 crore. Total market wide turnover was Rs 35653.72 crore.
The market-breadth, which reflects the condition of the broader market, turned negative on BSE as selling emerged for small and mid-cap stocks. On BSE, 1,395 shares declined as compared to 1,194 that advanced. Also, 61 stocks remained unchanged. The BSE Small-Cap Index closed at 7,020.11 down 0.2%, while the BSE Mid-Cap Index ended at 5,844.36, down 0.3% from its previous close.
Among the 30-Sensex pack, 22 declined while the rest advanced.
Wipro was the top-loser, down 2.36% to Rs 554, on a volume of 1.16 lakh shares. The BSE IT Index lost 1.4% to 5,013.47, and was the top loser among the sectoral indicies on BSE.
Other frontline IT pivotals were not spared either. Satyam Computers (down 2.15% to Rs 460.50) and Infosys Technologies (down 1.70% to Rs 2037) declined.
IT shares slipped following a rise in the rupee to a fresh nine-year high against the dollar on Monday, as the market tested how far the central bank would let it appreciate before intervening. By 9:14 IST, the partially convertible rupee was at 40.5450 per dollar, its highest level since May 1998, and stronger than Friday's close of 40.8450/8600.
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.
Dr Reddy's (down 2% to Rs 705), Hindalco (down 2.29% to Rs 144.75) and Cipla (down 1.60% to Rs 214) were the other prominent losers.
On the other hand, Ranbaxy Laboratories was the top-gainer, up 2.11% to Rs 390, on a volume of 3.12 lakh shares. It had touched an intra-day high of Rs 392.10. The company is seen benefitting from a Brazilian move to overcome the patent on Merck's anti-AIDS drug. On Friday (4 May 2007), Brazilian President Luiz Inacio Lula da Silva announced invoking the compulsory licensing provision for pharmaceuticals under the World Trade Organisation's (WTO) agreement on intellectual property - the TRIPS (Trade-Related Aspects of Intellectual Property Rights) - to buy copycat versions of efavirenz from laboratories certified by the World Health Organisation.
Index heavyweight Reliance Industries (RIL) advanced 1.48% to Rs 1606, as 9.67 lakh shares changed hands on BSE. The scrip fluctuated in a range of Rs 1617.80 – Rs 1593.
Hero Honda (up 1.02% to Rs 704.90), Bharti Airtel (up 0.64% to Rs 823), and ACC (up 0.46% to Rs 863) were among the other eminent gainers.
Ratings major ICRA was the most active stock on BSE, with a turnover of Rs 397 crore. The stock surged 17.06% to Rs 958. Rival firm Crisil surged 5% (maximum limit) to Rs 3205.45.
ICRA was followed closely by Indiabulls (Rs 260 crore), Indiabulls Real Estate (Rs 192.22 crore) and Reliance Industries (Rs 155.58 crore).
Shares from the oil refining sector posted handsome gains on renewed buying, as global crude oil price has been falling sharply in the last few trading sessions. Crude oil fell for a sixth day, extending a 6.8% drop last week, because of ample US supplies and signs of a gasoline output rising as refiners return plants from maintenance.
Crude oil for June delivery fell as much as 31 cents, or 0.5%, to $61.62 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
The contract fell $1.26, or 2%, to $61.93 a barrel on 4 May, the lowest closing since 19 April 2007. Oil had its biggest weekly decline since the week ended 5 January 2007. Oil had reached a four-week high of $66.70 on 27 April 2007, as sliding US fuel stockpiles pushed gasoline futures to an eight- month high.
Indian Oil Corporation (IOC) gained 5% to Rs 464.60, HPCL gained 4% to Rs 289.90 and BPCL gained 4% to Rs 349. Led forth by RIL, the BSE Oil and Gas Index gained 1.1%.
The firmer rupee has reduced the crude import bill of oil marketing firms. This, in turn, has helped them contain under-recoveries from the sale of petrol, diesel, LPG and kerosene. Since the last cut in prices of petrol and diesel in mid-February, the rupee has risen over 8% against the dollar.
Metal producers were in demand on renewed buying, owing to firm metal prices on the London Metal Exchange (LME). The BSE Metal Index was the top-gainer from among sectoral indices, in early afternoon session of trade, but pared gains later. The BSE Metal Index surged to an intra-day high of 10,146.47, but settled 0.5% lower at 9,946.27.
Ispat Industries (up 14.37% to Rs 17.35), Jindal Steel & Power (down 1.10% to Rs 2888), JSW Steel (down 0.80% to Rs 598), Sterlite Industries (up 0.63% to Rs 536.50), Tata Steel (down 0.25% to Rs 551.50), NALCO (up 1.40% to Rs 252), and Maharashtra Seamless (up 0.62% to Rs 577.55) had gained.
Thomas Cook India jumped 10% to Rs 565.65, after the company set 21 May 2007 as record date for a liberal 10-for-1 stock-split.
IT and BPO services provider MphasiS was down 1.10% to Rs 325.50, on unconfirmed rumours that it had bagged a $100-150 million deal in joint venture with EDS. Sources say that the deal was likely to be in the application developer space and a part of it may go to the Indian BPO. Sources also say that the deal is likely to last for four-six years. The deal is in the retail segment. It is MphasiS' second deal with EDS after the one with Vodafone.
Construction firm Pratibha Industries gained 5% to Rs 217.70, after it won a contract worth Rs 157 crore. The contract bagged in joint venture with Patel Engineering, pertains to a water tunnel project in Mumbai, and would be completed in 37 months.
Deccan Aviation was grounded by afternoon trade after rising 3.6% in early trade to Rs 118.50, following a report that one Lachmandas Ladhani, who owns 11% of Deccan Aviation, was looking at selling his stake. The stock lost 5% to Rs 108.60.
Jindal Photo surged 15.40% to Rs 112, on sustained buying due to strong Q4 March 2007 results. Jindal Photo reported a 326.3% growth in net profit in Q4 March 2007 at Rs 9.55 crore (Rs 2.24 crore). Net sales rose 5.7% to Rs 110.32 crore (Rs 104.40 crore).
For FY 2007 (year ended 31 March 2007), the net profit rose 41.7% to Rs 27.59 crore (Rs 19.47 crore). Net sales declined 5.4% to Rs 360.67 crore (Rs 381.25 crore).
GSFC tumbled 7% to Rs 167.50, on reporting a 50% fall in net profit for the March 2007 quarter at Rs 51.21 crore (Rs 102.25 crore). Net sales declined Rs 836.19 crore from Rs 942.12 crore. The results hit the market after trading hours on Friday (4 May 2007).
Mercator Lines declined 0.81% to Rs 42.65, on striking a high of Rs 45.10. The company said on Saturday it would invest about Rs 1000 crore to buy four dry bulk vessels through its Singapore unit.
The vessels, expected to be delivered by July, will take Mercator's consolidated fleet to 27 vessels with a capacity of about 2.45 million tonnes, Mercator Lines informed.
The Nikkei share average rose 1.58% on Monday to its highest close in more than three weeks, with technology shares such as Canon Inc., advancing following gains in their US peers and helped by a softer yen. The Nikkei was up 274.91 points, at 17,669.83, its highest close since 11 April 2007.
The Hang Seng was up 55.56 points (0.27%), to 20,896.64.
Foreign funds resumed buying on Thursday (3 May) after turning sellers in two trading sessions, on 27 April and 30 April. FIIs were net buyers to the tune of Rs 56.20 crore on 3 May 2007, as compared to their outflow of Rs 304.60 crore on 30 April 2007. The market was closed on 1 May 2007 and 2 May 2007, on account of public holidays. The net inflow from FIIs of Rs 56.20 crore on 3 May 2007, was a result of gross purchases worth Rs 2753.50 crore and gross sales to the tune of Rs 2697.30 crore.
But provisional data showed that foreign funds had turned sellers again on Friday (4 May), the day when the Sensex lost 144 points, led by a fall in index heavyweight Reliance Industries (RIL). FIIs were net sellers to the tune of Rs 131 crore on Friday. Domestic institutional investors were net buyers to the tune of Rs 299.10 crore on Friday.
The two key events to watch out for this week, are the outcome of elections in Uttar Pradesh (UP) and the outcome of US Federal Reserve's meeting on Wednesday (9 May).
The seventh and final phase of polls in Uttar Pradesh is scheduled for on Tuesday (May 8) and counting of votes is due on 11 May 2007, with results expected the same day. The UP vote is seen as a barometer of the national political trends.
US stocks climbed on Friday, lifted by talk of potential takeovers and after the influential non-farm payrolls data showed the world's biggest economy posted its slimmest gain in jobs in more than two years for April, helping to ease inflation concerns. The Dow rose 23.24 points (0.18%), to a record close of 13,264.62. The tech-laden Nasdaq Composite Index added 6.69 points (0.26%), to end at 2,572.15.
The main focus for the week will be an outcome of the US Federal Reserve meeting on Wednesday and, while no one expects a rate move, investors are keenly awaiting the Fed's latest assessment of the world's biggest economy.
Meanwhile, the government has proposed to remove loopholes in foreign direct investment (FDI) norms that allow foreigners to own stakes in Indian companies higher than the sectoral caps. The new guidelines, however, will not affect the existing foreign investments. The proposed change is to bring assorted forms of indirect foreign holding under the FDI cap, as well as to clearly define the contours of indirect holding.
At the moment, there are four distinct FDI slabs — ranging from 100% to a complete bar in some sectors. The telecom sector has a 74% sectoral cap, the aviation sector has a 49% sectoral cap, and the cap for the insurance sector stands at 40%.
India's largest real estate developer DLF said on Monday an initial public offering of 10.2% of the company should take place in the next three months as it had received regulatory approval for the sale. In 2006, the New Delhi-based DLF had dropped plans for what would have been India's biggest IPO due to a sharp market fall. At that time, the IPO was expected to raise up to $3.5 billion.