Sensex settles just below 15,000

The market saw intense volatility throughout the day, on alternate bouts of buying and selling. It was going strong till mid-afternoon trade when profit booking emerged, dragging it lower. Most of the Asian markets stabilised after initial volatility while a majority of European indices were trading higher. Shares from real estate, cement and banking were in demand while those of IT and auto were offloaded.

The BSE 30-share Sensex rose 49.93 points or 0.33% at 14,985.70. It opened slightly higher at 15,022.87 and slipped to a low of 14,896.47 as selling began. However, the broad market index again started heading north to touch a high of 15,134.53 at 13:50 IST. The market came off higher level later.

Sensex oscillated in a range of 238 points for the day.

The S&P CNX Nifty rose 10.50 points or 0.24% at 4,356.35. The Nifty August 2007 futures settled at 4317, a discount of 39.35 points as compared to spot closing.

The market breadth, indicating the overall health of the market, eased as the day progressed. On BSE 1,390 shares advanced as compared to 1,275 that declined, while 57 remained unchanged. The breadth was much stronger in afternoon trade when the advance-decline ratio was 2:1.

The BSE Mid-Cap Index rose up 53.96 points or 0.84% to 6,515.42 while the BSE Small-Cap index gained 30 points or 0.4% to 7,805.46

Meanwhile, India's trade deficit in June 2007 widened to $7.33 billion, data released yesterday, 1 August 2007, showed. Imports surged 36.7% to $19.2 billion in June 2007, while exports rose 14% to $11.87 billion, over June 2006.

The turnover on BSE declined to Rs 4,419 crore from Rs 6656 crore on Wednesday, 1 August 2007.

The NSE F&O turnover was Rs 38783.38 crore as compared to Rs 55904.92 crore on Wednesday, 1 August 2007.

Among the Sensex pack, 16 advanced while the rest declined.

Auto stocks remained under selling pressure throughout the day, as the sentiment was dampened by poor monthly sales figures. The BSE Auto Index lost 0.51% to 4,747.08

India's top bus and truck maker Tata Motors slipped 2.26% to Rs 652. Its vehicle sales fell 6.6% in July 2007 to 42,098 units over July 2006. Sales of commercial vehicles dropped 3.8% to 20,705 units in July 2007 over July 2006. Exports fell 17% to 4,382 units.

India's top motorcycle maker Hero Honda Motors shed 1.36% to Rs 660 after it said on Wednesday, 1 August 2007, it sold 2,01,191 units in July 2007, down 14.5 % from 2,35,314 sold in June 2006. The announcement was made after trading hours.

Bajaj Auto slipped 0.17% to Rs 2284, after India's second-biggest motorcycle maker’s vehicle sales in July 2007 fell 7% to 185,890 units over July 2006.

Top utility vehicle maker Mahindra & Mahindra (M&M) declined 2.98% to Rs 673 on 3.30 lakh shares, despite its sales rising 46% in July 2007 to 19,163 units over July 2006. It was the top loser from the Sensex pack.

However Maruti Udyog rose 1.7% to Rs 835 on the back of 24.8% rise in total vehicles sales to 57,909 vehicles in July 2007 over July 2006. The company sold 52,839 vehicles in the domestic market in July 2007, a rise of 18.33% over the same period last year.

IT stocks were subdued today. The BSE IT index declined 1.32% to 4,649.11, and was the top loser among the sectoral indices on BSE. Infosys (down 1.33 % to Rs 1904), TCS (down 1.33% to Rs 1101), Satyam Computers (down 1.50% to Rs 462.65), and Wipro (down 2.70% to Rs 462.85) were trading lower. The Indian rupee eased on Thursday, 2 August 2007 as investors awaited cues from the stockmarket as to whether foreign funds would continue cutting holdings on worries of a global credit crunch and declining risk appetite. The partially convertible rupee was at 40.44/45 per dollar in early deals.

India’s largest commercial bank State Bank of India jumped 2.95% to Rs 1594, on 11.23 lakh shares. It was the top gainer from the Sensex pack. It is holding talks with potential partners for its non-life insurance venture. It is also keeping options open for going alone in the general insurance business. SBI also plans to set up a holding company to transfer its share holding in its insurance and asset management subsidiaries. The new holding company, valued between $5 billion to $7 billion, would eventually be listed.

The BSE Bankex was up 1.5% at 7,946.80. It has gained 3.44% in the last one month from 7682.64 on 1 June 2007. Other banking stocks also posted gains on bargain hunting. Dena Bank (up 1.77% to Rs 51.65), Oriental Bank of Commerce (up 3.35% to Rs 228), Punjab National Bank (up 1.66% to Rs 495.50), Bank of India (up 1.67% to Rs 243), Bank of Baroda (up 1.67% to Rs 292), AXIS Bank (up 0.36% to Rs 620) and ICICI Bank (up 0.86% to Rs 899) gained.

Banks are seen cutting deposit rates after the Reserve Bank of India (RBI) on Tuesday, 31 July 2007, raised the cash reserve ratio (CRR) by 50 basis points. The hike in CRR means effective increase in cost of deposits for banks. The deceleration in credit offtake implies that banks have to roll back high deposit rates being offered on tenures of one year and above. Banks now have to maintain 7% of their deposits with the RBI. On these CRR deposits, banks will receive interest only on 3% of the deposits at `bank rate’, which is 6%. No interest is paid on the balance 4%. As RBI does not pay any interest on the 4% deposits, banks’ margin is impacted to that extent.

Telecom pivotals - Reliance Communications (up 2.34% to Rs 543), Bharti Airtel (up 1.95% to Rs 879.75), gained on bargain hunting.

Dr Reddy’s Lab, India's only drug maker listed on the New York exchange, gained 1.30% to Rs 630.50 after the company said it had reached an important milestone in testing an anti-diabetic molecule which could become the first patented drug from India.

Cement stocks showed strength on fresh buying. India’s second largest cement producer ACC advanced 2% to Rs 985. ACC's cement dispatches jumped 14.68% to 16.4 lakh tonnes in July 2007 over July 2006.

Ambuja Cements gained 1.55% to Rs 131 after its cement dispatches rose 20% to 13.9 lakh tonnes in July 2007 over July 2006.

Grasim gained 1.28% to Rs 2885 while UltraTech Cement slipped 0.91% to Rs 895.65. The Aditya Birla Group said on Wednesday its cement shipments rose 13.1% to 24 lakh tonnes in July 2007 over July 2006. Grasim and UltraTech Cement belong to the Aditya Birla Group

Reliance Energy (REL), India's second largest power generation and distribution company in terms of sales, rose 2.27% to Rs 754 on reports that it has emerged as the sole bidder for a Damodar Valley Corporation (DVC) power project in the Purulia district of West Bengal.

India’s largest private sector company Reliance Industries (RIL) which had surged to a high of Rs 1839, pared gains and managed to end just 0.18% higher at Rs 1801.25, on 8.27 lakh shares. As per reports, the government is likely to clear the price quoted by RIL for its gas from the Krishna-Godavari basin without seeking to control the price.

Battered real-estate stocks which were worst hit in Wednesday’s meltdown, made a comeback today on bargain hunting. The BSE Realty index gained the most among the sectoral indices on BSE. It rose 1.71% to 7,457.79. Unitech (up 3.82% to Rs 534), DLF (up 0.61% to Rs 588.15), Orbit Corporation (up 4.45% to Rs 334.40) and Indiabulls Real Estate (up 2.24% to Rs 511.85), edged higher.

Some of the top gainers from small-cap and mid-cap space were Hitachi Home (up 13.97% to Rs 143.95), Shree Precoated Steels (up 10% to Rs 368.05), Sulzer India (up 10% to Rs 513), JK Lakshmi Cements (up 8.53% to Rs 154), and Selan Exploration (up 8.10% to Rs 108.30).

Basnat Agro (down 8% to Rs 44), Simplex Castings (down 5.58% to Rs 58.40), Zensar Technologies (down 5.26% to Rs 246.50), and Praj Industries (down 5.21% to Rs 195.50), were the top losers from small-cap and mid-cap space.

Power Finance Corporation gained 1.52% to Rs 176.90 on reports it has raised $180 million via private placement in US.

Punj Lloyd rose 0.74% to Rs 267 after its subsidiary bagged a Rs 666-crore contract in Singapore for sub-structural works at the Sentosa Integrated Resort Development.

Northgate Technologies rose 1.85% to Rs 1379 on fixing 3 September 2007 as the record date for the purpose of issue of bonus shares in the ratio of 1:1.

Dhanalakshmi Bank jumped 2.16% to Rs 73.40. Its promoter offloaded 4.68% stake to a German Bank -MM Warburg Bank (Schweiz), through secondary market operations recently.

India’s largest zinc maker Hindustan Zinc gained 0.55% to Rs 714 after it had cut zinc prices by 3.8% to Rs 1,63,500 a tonne with immediate effect. It has also cut lead prices by 6.9% to Rs 1,37,200 per tonne.

India’s fourth largest term lending institution in terms of revenue IFCI jumped 8.71% to Rs 56.70 on media reports that Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and Barclays are interested in buying 26% in it

Nitco Tiles was down 0.84% to Rs 219 coming off sharply from an initial 6% surge. RBI said on Wednesday, 1 August 2007, FIIs could buy up to 49% in the company after the firm's board passed a resolution to this effect.

Civil engineering firm Hindustan Dorr-Oliver was locked at the 5% upper limit of Rs 113.75 after the company said it has got an order worth Rs 70 crore from Bharat Oman Refineries.

Royal Orchid Hotels slipped 3.51% to Rs 181.40 after it went Rs 6 per share (60% on face value of Rs 10 per share) ex-dividend from today.

NIIT slipped sharply from its high of Rs 1048 to end marginally lower at Rs 980 after it fixed 31 August 2007 as the record date for the purpose of sub-division of 1 equity share of Rs 10 each into 5 equity shares of Rs 2 each. The company made this announcement after market hours on 1 August 2007.

Asian markets were trading mixed amid high volatility. Shanghai Composite (up 2.49% to 4,407.73), Nikkei 225 (up 0.67% to 16,984.11) and Taiwan Weighted (up 0.66% to 8,950.57) gained. Hang Seng (down 0.05% to 22,443.56), and Seoul Composite (down 0.18% to 1,853.07) slipped.

Wall Street shot higher in a last-minute buying yesterday, 1 August 2007, after careening through a session made turbulent by ongoing concerns about US home loans and the credit market. The Dow gained 150.38 points, or 1.14%, to 13,362.37. Broader stock indicators also advanced. The Standard & Poor's 500 index rose 10.54 points, or 0.72%, to 1,465.81, and the Nasdaq Composite index was up 7.60 points, or 0.30%, to 2,553.87.

US crude prices surged to a record high of $78.77 a barrel on Wednesday, 2 August 2007 after the US Department of Energy reported that US crude stocks sank by 6.5 million barrels in the week ended 27 July.

The Bank of England today, 2 August 2007 left interest rates on hold at 5.75% as expected. The European Central Bank (ECB) also meets today, 2 August 2007, to set interest rates amid growing concern that an expanding subprime credit crunch in the US may have knock-on effects in Europe. ECB is expected to keep its refinancing rate unchanged at 4%, but may signal an increase to 4.25% in September 2007.