Sensex sheds 49 points in volatile trade

The Sensex settled on a weak note tracking negative cues from global markets. It was highly volatile throughout the day’s trading session. All the Asian markets were weak, while European markets were trading mixed. The Hang Seng was down 0.53%, while the Japanese Nikkei 225 index slipped 0.93%.

Back home, the BSE 30-share Sensex lost 49.49 points to 13,916.37, as per provisional closing. It had opened lower at 13,948.91, but immediately advanced higher as buying resumed to strike a high of 14,023.86.

The Sensex has been finding very difficult to sustain above the 14,000 mark, in the past few weeks. Fresh selling has emerged at every higher level.

The firm opening was due to the spillover of the buying binge that had resulted in a 169.70-point rally on Monday, 14 May 2007. The benchmark index slipped to a low of 13,885.46, in early afternoon session of trade.

The total turnover on BSE amounted to Rs 4131 crore, advancing from Rs 3327 crore in the late -afternoon session.

The market breadth was just about positive on BSE, with 1,314 shares advancing as compared to 1,270 shares declining, while 81 shares remained unchanged

Among the Sensex pack, 18 slipped while the rest moved higher.

Frontline IT pivotals stayed weak throughout the day’s trading session, as the rupee continued its upward march and was quoted at 40.83/84 against US currency in late morning deals on weak dollar overseas and sustained dollar selling by exporters, despite capital outflows.

Satyam Computers, down 2.24% to Rs 451.05, was the top loser, with 3.77 lakh shares changing hands on the counter.

Wipro (down 1.89% to Rs 533.60), Infosys (down 1.66% to Rs 1969) and TCS (down 0.90% to Rs 1238) were not spared either.

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.

PSU oil exploration major ONGC lost 1.52% to Rs 893 while auto major Bajaj Auto declined 1.20% to Rs 2634.

Index heavyweight Reliance Industries (RIL) was down 1.48% to Rs 1596.45 on 6.13 lakh shares. It slipped from a high of Rs 1623.25 following reports that it has got a tax benefit of Rs 376.17 crore in 2002-03 because of unreasonable concessions due to under-assessment by tax authorities, as per a report of the Comptroller and Auditor General (CAG) of India, which was tabled in Parliament on Monday, 14 May 2007.

State-run engineering major Bhel advanced 2.66% to Rs 2522, and was the top gainer. It plans to enhance its manufacturing capacity to 15,000 MW per annum with total investment of around Rs 3,200 crore during the Eleventh Plan (2007-2012).

Shares from the banking and financial pack witnessed buying interest on market rumors that CRR (cash reserve ratio) may be slashed by 50 basis points shortly. Private sector banking major ICICI Bank edged up 1.87% to Rs 886.30, while SBI gained 1.51% to Rs 1224 and HDFC Bank rose 1.44% to Rs 1010.10.

RNRL soared 5.70% to Rs 31.55 on huge volumes of 3.65 crore shares. it was included n F&O segment from 14 May.

Over the next few months, the progress of the June-September monsoom will hold the key. The Indian meteorological department on Monday, 14 May 2007, forecast annual monsoon rains would arrive in Kerala on 24 May 2007. The weather office said last month that this year's monsoon rains were likely to be 95% of the long-term average, with a five per cent margin of error. The annual monsoon is vital for India's economic health as it provides the main source of water for agriculture, which generates more than a fifth of gross domestic product (GDP).

Some important March 2007 quarter results are scheduled this week and the market will take its cue from how these results turn out. Bajaj Auto and Tata Steel report Q4 results on Thursday, 17 May 2007. The board of Bajaj Auto will also consider proposal to split the company into two. Tata Motors and Dr Reddy’s Laboratories unveil Q4 results on Friday, 18 May 2007.

FIIs pressed sales of Rs 336.20 crore on Friday, 11 May 2007, which was their biggest daily outflow this month so far. It was also their biggest daily outflow since 2 April 2007.

As per provisional data, FIIs were net sellers of Rs 85-crore equities on Monday, 14 May 2007. Domestic institutional investors were net buyers of Rs 1.79-crore equities on Monday.

US blue-chip stocks rose on Monday, 14 May 2007, with the Dow Jones industrial average gaining 20.56 points, or 0.15%, to end at 13,346.78. During the session, the Dow hit an all-time high of 13,383.76.

The Standard & Poor's 500 Index was down 2.70 points, or 0.18%, at 1,503.15. The Nasdaq Composite Index dipped 15.78 points, or 0.62%, at 2,546.44.

Oil extended gains seen in the past three sessions on concerns about supply disruptions. But forecasts of higher US oil stockpiles are limiting gains, with London Brent up 12 cents to $66.95 a barrel, while US crude rose 18 cents to $62.64.

India's central bank bought $2.3 billion in intervention in March, sharply lower than its record dollar purchases in February, the Reserve Bank of India's (RBI) monthly bulletin showed on Monday.

The March intervention took the RBI's dollar purchases to $22 billion since the start of November 2006. It bought a record $11.9 billion in February alone to check the rupee's rise.

India's foreign exchange reserves were $204 billion on 3 May, rising $26.8 billion in 2007, of which $9.4 billion had come since early March. Traders said a large part of this year's increase was due to the RBI's dollar purchases.

Before November last year, the RBI had not intervened since May 2006. In the fiscal year that ended on March 31, the central bought a total of $26.8 billion in intervention.

It bought a $8.14 billion in the financial year to March 2006, down from $20.85 billion in 2004/05.