Sensex snaps three-day rally

The BSE Sensex settled with losses today, after three straight days of rally, as selling pressute emerged at higher levels. The Sensex had surged 290 days in the past three sessions, from 14,218.11 on 24 May 2007 to 14,508.21 on 29 May 2007.

The benchmark index was trading firm in afternoon trade, suddenly lost steam due to heavy unwinding of long positions in last 45 minutes of trade. Weak Asian and European markets also spoiled the sentiment. Sensex lost 96.83 points or 0.67% at 14,411.38.

The market saw intense volatility throughout the day’s trading session. Earlier today, it opened lower at 14,501.46, tracking weak Asian markets. However, it recovered from there and advanced to strike a high of 14,576.37 in early afternoon trade, its highest level in 3-½ months since 9 February 2007. It slipped to a low of 14,379.21, during fag end of the trading session.

The S&P CNX Nifty which had crossed 4,300 mark to strike an all-time high of 4,301.60 earlier during the day, slumped 43.60 points or 1.02% at 4,249.65

Market breadth, which indicates overall health of the market, was weak as a host of small and mid-cap stocks came under selling pressure. 1608 shares declined on BSE as compared to 1006 that advanced. 61 remained unchanged. This was in sharp contrast to that in the morning session, when 1187 shares advanced as compared to 980 that declined.

The BSE Mid-Cap index was down 1.01% to 6,191.61 while the BSE Small-Cap index was down 0.52% to 7,349.56

The total turnover on BSE amounted to Rs 4737 crore.

Among the Sensex pack, 24 declined while the rest advanced.

Engineering and construction major Larsen & Toubro surged 6.44% to Rs 1976, on 11.03 lakh shares. It struck a fresh an all time high of Rs 2009, in intra-day trade. It reported 50% rise in net profit to Rs 701 crore in Q4 March 2007 from Rs 467 crore in Q4 March 2006, during market hours on 29 May 2007. Sales rose 35.01% to Rs 6248.24 crore in the Q4 March 2007 as against Rs 4627.87 crore in previous Q4 March 2006.

The net profit rose 38.62% to Rs 1403.02 crore in the year ended March 2007 as against Rs 1012.14 crore in FY 2006. Sales rose 19.31% to Rs 17578.84 crore (Rs 14733.85 crore). The company’s order book stands at over Rs 35000 crore.

Larsen & Toubro (L&T) is betting big on ship-building and power equipment manufacturing. The country’s largest engineering company aims at generating Rs 8,000 crore in five years from these businesses. The company is also gearing up to tap the potential in railways.

Led by L&T, the BSE Capital Goods Index advanced 1.68% at 11,079.43. Thermax (up 4.50% to Rs 490), Alstom Projects (up 3.58% to Rs 566), Gammon India (up 1.87% to Rs 386) and Bharat Electronics (up 3.83% to Rs 1804.75) gained.

Hero Honda (up 1.49% to Rs 696), Gujarat Ambuja Cements (up 0.61% to Rs 115.50), and HDFC (up 1.08% to Rs 1833), were the other gainers.

Reliance Energy slumped 4.08% to Rs 532.65, and was the top loser among the Sensex pack.

Reliance Communications (down 3.89% to Rs 500.90), HDFC Bank (down 3.61% to Rs 1104), and Hindalco (down 2.85% to Rs 140.40), were the other losers.

State run engineering major Bhel, which galloped to an all time high of Rs 2922.50 in intra-day trade, slipped on profit booking. It lost 3.12% to Rs 2767, on 2.83 lakh shares. It had reported 32.54% rise in net profit in Q4 March 2007 to Rs 1150.37 crore from Rs 867.95 crore in Q4 March 2006, after trading hours on 25 May 2007. Sales rose to Rs 6919.68 crore, from Rs 5515.69 crore in March 2006. The results were announced after trading hours on 25 May 2007. Earlier, Bhel had set 1 June 2007 as record date for a liberal 1:1 bonus issue.

Index heavyweight Reliance Industries (RIL) declined 0.27% to Rs 1750 on 8.54 lakh shares. The stock had slipped to a low of Rs 1742 in early trade, before recovering in early afternoon trade. The stock lost ground again in late trade. Its all time high is Rs 1785.

IT pivotals slipped on renewed selling. IT stocks have not participated in the recent rally, due to concerns of stronger rupee. The BSE IT index lost 1.92% to 4,814.09. It was the top loser among the sectoral indices on BSE.

Satyam Computers (down 1.27% to Rs 466), TCS (down 1.42% to Rs 1213.95), Infosys (down 2.39% to Rs 1905) and Wipro (down 0.26% to Rs 538) 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.

Rupee eased away from a recent nine-year high on Wednesday, 30 May 2007, as investors pared positions in the local unit on concerns over central bank intervention, and on dollar demand from oil refiners for month-end payments.

The rupee is Asia's best performing currency against the dollar this calendar year, gaining more than 9% on strong capital inflows into the fast-growing economy.

Pharma stocks, which had advanced in morning trade, pared gains, as the day progressed, and settled lower. Cipla (down 1.51% to Rs 215.25), Ranbaxy Laboratories (down 0.78% to Rs 387.40), and Dr Reddy’s (down 0.24% to Rs 654), declined.

As per reports, the Norwegian Appeals Court handed down a favorable decision for Ranbaxy in its case against Pfizer, involving key Norwegian patents on Atorvastatin in Norway. Atorvastatin is a cholesterol-lowering drug which is marketed by Pfizer as Lipitor.

Insecticides India settled at Rs 109.50, a discount of almost 5% over IPO price of Rs 115. The scrip debuted at Rs 105, hit a high of Rs 117, and low of Rs 101.15. The counter saw volumes of 47.06 lakh shares on BSE. The company had priced its IPO at the top end of the Rs 97 to Rs 115 price band.

MIC Electronics settled at Rs 335.65 on BSE, a premium of nearly 124% over IPO price of Rs 150 per share. The stock debuted at Rs 210.25, which also its low of the day. It surged to a high of Rs 367.80. The counter saw huge volumes of 1.45 crore shares on BSE.

McDowell Holdings jumped 20% to 195.60, compared to base price of Rs 163, on its listing on BSE today. On BSE, only 1442 shares were traded on the counter, with pending buy order of 1.37 lakh shares at maximum limit. The listing McDowell Holdings (MHL) on the bourses follows a restructuring scheme undertaken at United Spirits (USL) whereby investment business of USL was transferred to MHL as a going concern.

MHL had allotted equity shares to the shareholders of USL, in the ratio of 1 equity share for every five shares held in USL.

Debutante MIC Electronics was the top traded counter on BSE with total turnover of Rs 492.60 crore followed by Larsen & Toubro (Rs 218 crore), Orbit Corporation (Rs 150.40 crore), Reliance Industries (Rs 150.40 crore) and Infosys (Rs 120.70 crore).

MIC Electronics also topped the volume chart with total volumes of 1.45 crore shares followed by Reliance Natural Resources (1.42 crore shares), IFCI (71.80 lakh shares), JP HydroPower (70 lakh shares) and Orbit Corporation (60 lakh shares).

Crompton Greaves slumped 6.45% to Rs 235.50 even after it reported 24.6% growth in net profit in Q4 March 2007 to Rs 69.92 crore as against Rs 56.10 crore in Q4 March 2006. Sales rose 34.93% to Rs 1077.17 crore (Rs 798.31 crore). The net profit rose 17.98% to Rs 192.37 crore in the year ended March 2007 as against Rs 163.05 crore in FY 2006. Sales rose 45.20% to Rs 3659.98 crore (Rs 2520.59 crore).

Redington India surged 10% to Rs 234.50 on high total volumes of 33.66 lakh shares on BSE, after a block deal of 2.26 lakh shares was executed on NSE at Rs 235.20 per share.

Lakshmi Machine Works declined 1.80% to Rs 2700, after it today reported 18% fall in net profit in Q4 March 2007 to Rs 68.62 crore as against Rs 83.50 crore in Q4 March 2006. Sales rose 39.12% to Rs 549.18 crore (Rs 394.75 crore).

Bharati Shipyard gained 2.63% to Rs 457 after 1.20 lakh shares changed hands in a single block deal on BSE at Rs 459.

Britannia Industries edged lower by 2.80% to Rs 1559.75 its net profit declined 26.50% to Rs 107.60 crore in the year ended March 2007 as against Rs 146.40 crore in FY 2006. Sales rose 28.28% to Rs 2199.30 crore (Rs 1714.50 crore). It reported 43% growth in net profit in Q4 March 2007 to Rs 39.80 crore as against Rs 27.80 crore in Q4 March 2006. Sales rose 31.98% to Rs 599.20 crore (Rs 454.00 crore).

Action Construction Equipment vaulted 5% to Rs 272.60, on the back of a 116% surge in net profit in Q4 March 2007 to Rs 7.01 crore as against Rs 3.24 crore in Q4 March 2006. Sales rose 84.40% to Rs 83.48 crore (Rs 45.27 crore). The net profit rose 57.05% to Rs 19.93 crore in the year ended March 2007 as against Rs 12.69 crore in FY 2006. Sales rose 48.04% to Rs 245.28 crore (Rs 165.68 crore).

Chinese stocks tumbled 6.50% or 281.36 points to 4,053.08 on Wednesday, 30 May 2007, after China tripled a share-trading tax to cool its red-hot market, buffeting Asian and European markets but failing to trigger the broad rout some had feared.

Investors have feared a sharp fall in China could ripple through financial markets as it did in late February 2007. China's Ministry of Finance raised stamp duty on share transactions to 0.3% from 0.1% in what was seen as the strongest attempt yet to curb speculation in a market that had risen more than 60% so far this year.

All the Asian and European markets were trading weak, except Seoul Composite, which rose 0.06%. The Nikkei average fell 0.48% or 84.30 points to 17,588.26. The Hang Seng index lost 0.86% or 175.83 points to 20,293.76

Wall Street eked out a modest gain yesterday, 29 May 2007, as investors, wary about the upcoming release of the Federal Reserve minutes, bought cautiously amid a series of new takeover deals and upbeat consumer confidence figures. The Dow Jones industrial average rose 14.06 points, or 0.10%, to 13,521.34. The Standard & Poor's 500 index gained 2.38 points, or 0.16%, to 1,518.11, while the Nasdaq composite index advanced 14.87 points, or 0.58%, to 2,572.06.

As per reports, the marketwide rollover stands at 48%, while Nifty rollover was 43%, ahead of the derivative expiry for May 2007 series scheduled on Thursday, 31 May 2007. Volatility is expected to remain high ahead of it.

Oil prices held at $68 a barrel on Wednesday in London ahead of U.S. inventory data expected to show rising crude and fuel stocks. London Brent crude traded up 14 cents at $68.27 a barrel, after tumbling $1.58 on Tuesday on U.S. refinery restarts and easing concerns over Nigerian shipments. U.S. crude was up 10 cents at $63.25, after a $2.05 plunge on Tuesday.