Sensex settles just below 14,400

The BSE Sensex, which stayed above the 14,500 level, for most past of the day, suddenly started declining in late afternoon trade, on heavy profit booking.

It gained 59.44 points uor 0.41% to settle at 14,397.89. It opened higher at 14,467.85 and surged to strike an intra-day high of 14,527.47 in early trade, buoyed by strong buying momentum for index pivotals. Positive cues from US and Asian markets also helped the early momentum. It touched a low of 14,368.40, just couple of minutes before the closing bell.

Sensex is 325-odd points away from all time high of 14,723.88 struck on 9 February 2007.

The S&P CNX Nifty, which had struck an all-time high of 4,295.60 points in early trade today, settled with gain of 8.40 points or 0.20% to 4,256.55. Its earlier all time high was 4,291.40 of 23 May 2007.

Asian and European markets were trading mixed. Japan's Nikkei was up 0.61% or 106.38 points at 17,587.59 and Hong Kong's Hang Seng rose 0.04% or 9.10 points at 20,529.76.

The market breadth, which indicates overall health of the market was strong on BSE with under 1.50 gainers for every loser. 1470 shares advanced as compared to 1094 that declined, while 97 remained unchanged. It was much stronger at 10:30 IST, with over 3.5 gainers for every loser. 1143 shares had advanced as compared to 348 that declined, at that time.

The BSE Mid-Cap index was up 1.03% to 6,206.70, while the while the BSE Small-Cap index advanced 0.95% to 7,334.64

The market is expected to stay volatile over the next few days, ahead of the expiry of derivative series for the month of May 2007 scheduled on Thursday, 31 May 2007.

The total turnover on BSE amounted to Rs 4,194.04 crore, while the NSE F&O turnover amounted to Rs 39,304.2 crore.

Among the Sensex pack, 19 advanced while the rest declined. In early trade, all the Sensex constituents had advanced.

Shares from banking & financial sector staged a strong comeback today on renewed buying, with the BSE Bankex advancing 1.39% at 7,564.08, and was the top gainer among sectoral indices on BSE.

HDFC Bank surged 5.20% to Rs 1,125 on volumes of 1.01 lakh shares, and was the top gainer. Other shares from banking & financial space ICICI Bank (up 1.20% to Rs 924) and State Bank of India (up 0.43% to Rs 1304) advanced.

The BSE Bankex had declined on Friday, 25 May 2007, on rumours of the RBI, which has already raised the CRR thrice since December 2006, contemplating another hike, though only on incremental deposits this time. CRR is the percentage of deposits that banks are required to keep with the RBI. The RBI is particularly concerned about absorbing excess liquidity since it has lowered the inflation target from 5-5.5% to 4-4.5% for 2007-08.

Meanwhile, ICICI Bank has sought the approval of the Foreign Investment Promotion Board (FIPB) to offload up to 24% equity in its investment company, ICICI Holdings, proposed to be set up as a wholly owned subsidiary. ICICI Bank plans to transfer its investments in the ICICI companies, comprising ICICI Life, ICICI General, ICICI AMC and ICICI Trust, to ICICI Holdings at the book value of each of the respective investments, aggregating to Rs 222.8-crore as of 31 March 2007.

Housing finance major HDFC gained 1.66% to Rs 1849, following its announcement of raising Rs 3,114 crore by issuing equity on a preferential basis to US based Carlyle Group and Citigroup, for funding growth of HDFC’s banking and insurance subsidiaries. It will issue fresh capital amounting to 7.11% of its equity on a preferential basis. After the issue, HDFC’s total foreign holding will be 80.4%, up from the existing 78.9%. The shares would be priced at Rs 1,730 per equity share of Rs 10 each.

Andhra Bank (up 5.14% to Rs 91), Allahabad Bank (up 3.93% to Rs 88.50), Bank of Baroda (up 2.06% to Rs 275.95) and Oriental Bank of Commerce (up 1.04% to Rs 232.40) moved upwards.

PSU engineering major Bharat Heavy Electricals (BHEL) was up 0.85% to Rs 2725 after reporting 32.54% rise in net profit in Q4 March 2007 to Rs 1150.37 crore from Rs 867.95 crore in Q4 March 2006. Sales rose to Rs 6919.68 crore, from Rs 5515.69 crore in March 2006. The net profit rose to Rs 2414.70 crore in the year ended FY 2007, from Rs 1679.16 crore in FY 2006. Sales rose to Rs 17237.53 crore in FY 2007, compared with Rs 13228.26 crore in FY 2006. The results were announced after trading hours on Friday, 25 May 2007. Bhel had set 1 June 2007 as record date for a liberal 1:1 bonus issue.

ACC gained 1.16% to Rs 868, after RBI allowed FIIs to buy further shares of the cement major as their holding had slipped below 22%.

The ONGC scrip rose 0.52% to Rs 912, on reports, ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corporation (ONGC), plans to acquire Royal Dutch/Shell's 33% stake in a deep-sea gas field off Egypt for $160 million and bring the fuel in liquefied form (LNG) to India. Petronas of Malaysia has pre-emption right - it can match OVL's bid within 30 days.

Ranbaxy Laboratories rose 0.22% to Rs 382.50 after its wholly owned subsidiary, Ranbaxy Laboratories Inc. acquired from Bristol-Myers Squibb Company (BMS) the US rights to a group of 13 dermatology products. These brands will be sold in the US market under the Ranbaxy Laboratories Inc. label.

Index heavyweight Reliance Industries (RIL) slipped 0.45% to Rs 1719 on 3.24 lakh shares. The stock was highly volatile throughout the day, and moved in a range of Rs 1715 to Rs 1749.85. It will begin natural gas production from its Krishna Godavari fields in Bay of Bengal from July 2008 as planned.

After opening firm, IT pivotals declined, as Indian rupee was rangebound near a nine-year high on Monday, 28 May 2007, with state-run banks buying dollars possibly on behalf of the central bank. The BSE IT Index lost 0.9% at 4,915.25, and was the top loser among BSE sectoral indices.

Infosys Technologies lost 1.42% to Rs 1958.10 on 3.90 lakh shares, and was the top loser among IT pivotals. Wipro (down 0.83% to Rs 538), TCS (down 0.63% to Rs 1222) Satyam Computers (down 1.20% to Rs 466.20), HCL Technologies (down 2.97% to Rs 340) and i-flex Solution (down 2.06% to Rs 2180) declined. A rise in the rupee directly impacts revenue and profit of IT firms, which derive a lion’s share of revenue from exports to the US.

Tata Consultancy Services (TCS) increased its stake from 51% to 100% in the joint venture IT services Company TCS do Brasil. It acquired Grupo TBA's 49% stake for a consideration of $ 33.4 million. TCS do Brasil recorded a top line of $ 66.5 million for the year ended 31 March 2007.

Binani Cement settled at Rs 68.65 on BSE, a discount of 8.40% over IPO price of Rs 75 per share. The scrip listed on BSE at Rs 75, and surged to hit a high of Rs 79 and a low of Rs 67.45. The counter clocked high volumes of 57.62 lakh shares on BSE. The Binani Cement IPO was subscribed 1.36 times.

Brokerage firm India Infoline surged 32.39% to Rs 589.80 after four top officials - Bharat Parajia, H Nemkumar, A Dange, V Jagannath, from rival brokerage CLSA joined the company. It was the top traded counter on BSE with total turnover of Rs 134 crore. Unitech (Rs 124 crore), Advanta (Rs 120 crore), Reliance Natural Resources (Rs 109.50 crore) and Reliance Capital (Rs 98 crore) followed India Infoline, in that order.

Reliance Natural Resources (RNRL) topped the volumes chart with volumes of 2.89 crore shares on BSE followed by Reliance Petroleum (79.55 lakh shares), Dish TV (60 lakh sares), Binani Cement (57.60 lakh shares) and Nagarjuna Fertilisers (46 lakh shares).

Detergent maker Nirma surged 20% to Rs 198.30, after last week it received a green signal from Gujarat High Court to acquire pharma company Core Healthcare, rejecting opposition from minority lenders. Nearly 60% of the lenders to Core Healthcare sold their loans to Asset Reconstruction Company of India (ARCIL) after the company failed to service its dues.

iGate Global surged 9.27% up at Rs 352.20. Early last month, it had reported strong Q4 March 2007 results. iGate Global’s net profit surged 308% to Rs 21.42 crore in Q4 March 2007 as against Rs 5.25 crore in Q4 March 2006. Net sales rose 29.65% to Rs 195.19 crore in Q4 March 2007 from Rs 150.55 crore in Q4 March 2006. The net profit rose 1482.26% to Rs 49.05 crore in the year ended 31 March 2007. Net sales rose 32.62% to Rs 747.27 crore in FY 2007.

Thermax soared 9.27% to Rs 480.90 on expectations of strong results for forthcoming quarter due to an expected increase in captive power generation and strong growth in industrial tariffs. Products and solutions aimed at environment protection will also be important revenue-drivers for the company, going forward.

Welspun Gujarat Stahl Rohren rose 6.79% to Rs 172.10. The Welspun scrip has been in continuous uptrend since it announced good quarterly performance on 14 May 2007 and its healthy order book also kept the momentum alive in the stock over the past few days.

Net profit of Welspun Gujarat Stahl Rohren soared 113.92% to Rs 41.50 crore in the quarter ended March 2007 (Rs 19.40 crore). Sales rose 13.06% to Rs 728.10 crore in the quarter ended March 2007 (Rs 644.00 crore). Welspun's current unexecuted order book stands at Rs 4000 crore. This will be executed in the next 12-18 months.

Mahindra & Mahindra rose 0.72% to Rs 737 even as it during trading hours today, 28 May 2007, reported 26.5% fall in net profit in Q4 March 2007 to Rs 236.04 as compared to Rs 321.18 crore same period previous year. Sales rose 20.9% to Rs 2782.81 crore in Q4 March 2007 (Rs 2302.61 crore). Net profit soared 24.7% to Rs 1068.39 crore in the year ended 31 March 2007 compared to Rs 857.10 crore in FY 2006. Sales rose 23% to Rs 10245.22 crore in FY 2007 (Rs 8326.54 crore).

Crompton Greaves soared 7.59% to Rs 243 on company’s plan to acquire a European firm Microsol Holdings together with other companies in Microsol group for 10.50-million euros. Microsol Holdings is based in Ireland with operations in UK, USA and Ireland and is engaged in the business of providing sub-station automation for MV and HV sub-stations. This acquisition will increase Crompton Greaves' strengths in high-end engineering and sub-station automation capabilities.

Tata Tea gained 2.56% to Rs 937 after selling its stake in US-based Glaceau to Coca-Cola It announced after market hours on Friday, 25 May 2007, that it would receive about $1.2 billion for selling its 30% stake in vitamin water maker Glaceau to Coca-Cola. This is nearly twice what it paid for it. Tata Tea’s UK subsidiary, Tata Tea (GB) investments held a 25%stake, and its holding company Tata Sons the other 5%.

Suzlon Energy slumped 7.21% to Rs 1279 on volumes of 6.97 lakh shares on BSE. It had surged 18.94% to Rs 1378.45 on high volumes of 17.46 lakh shares, after the world’s sixth largest wind turbine generator finally secured German REpower as French major Areva opted out of the race. Suzlon's last bid for REpower was also at 150 euros per share, valuing it at 1.5 billion euro.

According to Tulsi Tanti, Suzlon's chairman, his company effectively holds 62% stake in REpower through its partnership with Portugal's Martifer and as per the agreement with Areva. The acquisition will be EPS accretive from FY 2008, and will make Suzlon the fourth largest wind turbine maker in the world with an integrated power generation capacity of 3400 megawatt, which includes REpower capacity.

Ashapura Minechem jumped 4.19% to Rs 267.50 after two block deals of 5 lakh shares each (amounting to a little under 2% stake changing hands) were struck on the counter on BSE at an average price of Rs 264.05 per share by 11:42 IST. The counter saw high total volumes of 13.56 lakh shares on BSE.

Northgate Technologies soared 10% to Rs 1122 after its board recommended a liberal 1:1 bonus issue (one equity share for every one equity share held) for equity shares.

Real estate developer Unitech surged 8.66% to Rs 594.40, after its board also recommended issue of 1:1 bonus issue. This is the second bonus issue from the company in the last 12 months.

Unitech posted nearly 15-fold spurt in consolidated net profit to Rs 1,305.49 crore for the year ended March 2007, when compared with Rs 87.64 crore in the same period a year ago. Consolidated total income jumped over three times to Rs 3,388.36 crore (Rs 954.50 crore).

US stocks rose on Friday as takeover news, including Nasdaq's plan to buy Nordic exchange company OMX, boosted investor optimism, although trading was light ahead of a long holiday weekend. The Dow Jones industrial average gained 66.15 points, or 0.49%, to end at 13,507.28.

The Standard & Poor's 500 Index rose 8.22 points, or 0.55%, to finish at 1,515.73. The Nasdaq Composite Index climbed 19.27 points, or 0.76%, to close at 2,557.19. All US financial markets will be closed on Monday, 28 May 2007, in observance of the Memorial Day holiday.

Foreign institutional investors were net sellers to the tune of Rs 147.10 crore on Friday, 25 May 2007.

Crude oil fell in New York on speculation US fuel prices may ease as refiners increase output to meet summer demand. Crude oil for July delivery fell as much as 47 cents, or 0.7%, to $64.73 a barrel, in after-hours electronic trading on the New York Mercantile Exchange today.

Brent crude oil for July settlement was at $70.35 a barrel, down 34 cents, on the London-based ICE Futures exchange.

Meanwhile, as per report, the Securities and Exchange Board of India (Sebi) is set to roll out a more sophisticated version of short-selling in equity markets for both domestic and foreign institutional investors (FIIs) in the first week of July. This comes after a gap of more than six years.

Under the proposed scheme, short selling in individual scrips will be capped at 10% of the free float of shares of any company. The free float of a listed security is the proportion of shares available for purchase in the market by investors.

It may be recalled that short-selling was banned by Sebi on 7 March 2001, following a crash in stock prices.