Sensex settles below 14000

A fall in index heavyweight Reliance Industries (RIL) caused by an interim order by Bombay High Court against the company, fall in IT stocks and select other blue chips pulled market lower today. Sensex lost 150.63 points, as per provisional data, to 13927.58, a day after it had surged 206 points on Thursday (3 May). Domestic bourses today bucked firm Asian markets.

The weakness stemmed in afternoon trade. The market was range bound in the first two hours of trade.

The market breadth was weak. 1450 shares declined on BSE as compared to 1116 stocks that rose. 101 shares were unchanged. Losers outpaced gainers by a ratio of 1.29:1.

BSE clocked a turnover of Rs 4246 crore.

Reliance Industries shed was down 2.4% to Rs 1583, hit by reports that the Anil Ambani controlled Reliance Natural Resources (RNRL) had secured an interim stay from the Bombay High Court, preventing RIL from selling 40 million standard cubic metres per day (MMSCMD) of gas out of its estimated potential of 80 MMSCMD. RIL plans to appeal against the interim order in a division bench.

Cellular services major Bharti Airtel dropped 2.2% to Rs 815, engineering & construction major L&T shed 2.3% to Rs 1700 and PSU power equipment major Bhel lost 1.6% to Rs 2493

IT pivotals edged lower as the rupee firmed up against the US dollar. Satyam Computer was down 1.8% to Rs 470, TCS shed 1.1% to Rs 1275, Wipro shed 0.4% to Rs 568 and Infosys shed 0.2% to Rs 2076. A stronger rupee directly impacts the revenue and profits of IT firms, which derive a lion’s share of revenue from exports. The rupee today gained more than half a percent to about 40.88 per dollar, within sight of last week's nine-year high at around 40.70.

The government on Thursday recast the tax on Employee Stock Options (ESOPs). The Fringe Benefit Tax (FBT) will now be applicable on the date of vesting. FBT would be imposed on the difference between the fair market value (FMV) on the date on which the option vests with the employees and the amount actually paid by the employee for the shares. The Lok Sabha on Thursday passed the Union Budget 2007-08 by a voice vote

State Bank of India ended in the green with a slight gain of 0.3% at Rs 1126. The stock pared gains after an intra-day 3.5% surge in the stock to Rs 1161.70.

ICICI Bank dropped 2% to Rs 853. Late last week, ICICI Bank had said it planned a Rs 20000 crore equity issue.

The wholesale price index rose 5.77% in the 12 months to 21 April 2007, lower than previous week's increase of 6.09%, data showed on Friday.

Hindalco gained 1.4% to Rs 148. Hindalco’s net profit rose 15% in Q4 March 2007 to Rs 721 crore from Rs 626.30 crore. The results hit the market in mid-afternoon trade.

Housing finance major HDFC dropped 2.3to Rs 1639. During trading hours on Thursday, HDFC had reported 28.96% growth in net profit in Q4 March 2007 quarter to Rs 550.05 crore as against Rs 426.52 crore during the previous quarter ended March 2006.

Cement stocks came off higher level from early rise. ACC rose 0.5% to Rs 857.05, off early high of Rs 880.20. Grasim shed 0.9% to Rs 2470, off early high of Rs 2565. Gujarat Ambuja Cements shed 1.3% to Rs 120; it was off an early high of Rs 125.40. The government on Thursday (3 May 2007) withdrew higher fixed duty on cement manufacturing proposed in the Union Budget, and instead levied 12% ad-valorem duty on 50 kg bags costing more than Rs 190 a piece.

Cipla gained 2.3% to Rs 216.65. The stock had plunged 14.2% to Rs 217.10 in a single trading session on 27 April 2007, hit by its dismal Q4 March 2007 results. The stock had retreated further to Rs 210.85 on 30 April 2007. It had also recovered a bit to Rs 211.70 on 3 May 2007.

Admitting that prices of essential commodities like pulses and edible oils have hardened since the last one year affecting the common man, the government today said measures already initiated will be further intensified to ease the situation. Finance Minister P Chidambaram said that a two-pronged strategy has been adopted to tackle inflation both in the short term and in the long term. On correcting the supply-demand mismatch of essential goods, he said supply can be augmented either by way of increased procurement within the domestic market or through imports. "I hope the agriculture minister will take a decision in this regard," he said in Lok Sabha while replying to questions on price rise.

Asian shares forged ahead on Friday, with Australia setting another record high, while the dollar clung to gains, nervously waiting on US payroll data due later for clues on Federal Reserve policy. Market sentiment was lifted by the bellwether Dow Jones industrial's push to yet another record close, helped by a surprisingly strong US service sector survey and a drop in labour costs. Japanese and Chinese financial markets remained shut for their respective Golden Week holidays.

US stocks edged higher on Thursday, after a series of indicators showed signs of strength in the economy and a moderate rise in wage inflation. The Dow industrials closed at a record for the third straight day, led by a 3.7% gain in Verizon Communications Inc. on news that it was taking video and Internet customers from rival Cablevision Systems. The Dow rose 29.50 points, or 0.22%, at 13,241.38. The Standard & Poor's 500 Index was up 6.47 points, or 0.43%, at 1,502.39. The Nasdaq Composite Index was up 7.62 points, or 0.30%, at 2,565.46.

The key data later in the day today is US job data for April. Median forecasts are for a payroll increase of 100,000 in April, with the jobless rate ticking up to 4.5% from 4.4% in March.