Markets close marginally lower after volatile session
03 January 2005
The markets turned highly volatile today as nationwide
raids by the CBI on government officials led to market
rumours about more searches on market participants as
well. The SEBI action against some Kolkata-based brokers
for indulging in illegal trading practices yesterday gave
some credence to these rumours. The frontline indices
were ripe for a technical correction after the sharp rise
earlier in the week and traders were keen to reduce positions
ahead of the weekend.
The markets opened the day with gains as some of the frontline
stocks held on to their gains from the last few days.
Technology stocks firmed up in opening trades and helped
the indices.
Selling pressure emerged by early afternoon and the Sensex
lost over 100 points within an hour. The fall was led
by heavyweights ONGC and Reliance Industries, both of
which lost more than 2 per cent each in intra-day trades.
Though ONGC managed a partial recovery in late afternoon
trades, Reliance closed the day with losses of close to
2 per cent.
Hindustan Lever was another significant loser among heavyweights,
closing the day with losses of over 2 per cent. ITC continued
its downtrend of last two days and declined by close to
a per cent.
Some of the technology stocks turned weak in afternoon
trades, Wipro closing with losses of well over a per cent
and Infosys declining close to half a per cent. However,
Satyam rallied in late trades and closed more than a per
cent higher while TCS managed to add more than half a
per cent.
The recovery started in late afternoon trades and the
indices recovered most of the lost ground on good buying
in select heavyweights.
Strong buying was seen in power utility stocks Reliance
Energy and Tata Power, in late trades. Reliance Energy
closed almost 4 per cent higher while Tata Power added
well over 2 per cent.
ICICI Bank also saw good buying in the closing hours as
the stock rallied to a new lifetime high and closed with
gains of over 2 per cent. SBI added more than half a per
cent. HDFC Bank remained weak and lost more than a per
cent while HDFC added close to 2 per cent. Punjab National
Bank also gained close to 2 per cent.
Stocks of oil marketing companies turned weak in early
trades before recovering part of the losses. HPCL lost
more than 2 per cent while BPCL declined well over a per
cent. Indian Oil closed more than half a per cent lower.
The Sensex closed at 8634, a loss of 16 points, and the
Nifty at 2601, down by 10 points. Nifty October futures
closed at a discount of 5 points to the spot index.
Reliance Energy, IPCL and Tata Power were the biggest
gainers among Nifty stocks while Zee Tele, HLL and HPCL
were the major losers.
The US markets recovered from the subdued trend of the
last few weeks, ahead of the third quarter earnings season,
despite the firm trend in oil prices. Good earnings forecasts
from some of the frontline companies also helped the indices.
The Dow and S&P 500 closed with gains of close to
a per cent each. Gains on the NASDAQ were higher at more
than a per cent, as technology stocks bounced back strongly.
Indian ADRs had a mixed day once again on the US exchanges
yesterday, despite the market recovery. Dr Reddy's, which
has been rising on Indian exchanges for the last few days,
was the biggest gainer. The stock closed almost 4 per
cent higher. ICICI Bank recovered from the previous day's
losses and closed almost 2 per cent higher. VSNL added
half a per cent. MTNL was the biggest loser, closing more
than 2 per cent down, followed by Tata Motors, which lost
well over a per cent. HDFC Bank closed almost unchanged.
Technology ADRs faced some selling pressure after two
days of gains, even though Satyam managed to maintain
the uptrend. Wipro lost almost a per cent while Infosys
closed with marginal losses.
Crude oil prices maintained their uptrend yesterday as
well, adding more than two-thirds of a per cent. The disruptions
caused by the two hurricanes have raised fears of tight
winter supplies of heating oil. Crude oil futures for
November delivery closed at $66.79 to a barrel, 44 cents
higher from the previous day's close, on the NYMEX yesterday.
The commodity is trading with marginal losses in early
European trades today.
Cement major ACC has formally signed the agreement to
transfer its refractory division to ICICI Venture. ACC
had announced this deal earlier this year and the company
will raise Rs257 crore from the sale. ICICI Venture has
floated a new company called Ace Refractories, which will
take over and run the business. The stock added more than
a per cent.
The management of Mahindra & Mahindra has confirmed
that it is keen to acquire Romanian tractor manufacturer
Tractorul, for which the company has submitted a bid to
the Romanian government. The company said it is also planning
to enter the Turkish and Egyptian tractor markets. The
stock closed one-and-a-half per cent higher.
Reliance Capital informed the exchanges that its acquisition
of insurance company AMP Sanmar has received the approval
of the Insurance Regulatory Authority. Reliance Capital
had announced earlier that it would be acquiring a 100
per cent stake in AMP Sanmar for an undisclosed amount.
The stock lost more than 5 per cent in today's trade.
Media reports quoting Hinduja group officials have indicated
that Ashok Leyland is planning to set up a truck assembly
and bus building unit in Dubai. Further details are not
available.
Satyam Computers said its BPO subsidiary, Nipuna, would
meet this year's revenue guidance of $18 million. The
subsidiary had reported revenues of $10 million during
last year.
Bajaj Auto expects total monthly unit sales to cross the
200,000 mark during September. This would be the best
ever monthly sales performance by the company. The stock
has been on an upswing for the last few days and remained
firm throughout today's volatility. The stock closed with
gains of close to 2 per cent.
Mid-cap action
Mid-caps continued their weakness in today's trade as well. Heavy selling was seen in early afternoon trades as the market breadth turning extremely negative. The mid-cap index lost more than a per cent by early afternoon, before recovering in late trades. Small caps on the BSE declined further as a large number of stocks remained in the lower circuit. The CNX mid-cap index lost 6 points and closed the day at 3807. The BSE small-cap index lost close to 2 per cent for the second day.
The board of directors of McDowell Limited has passed an enabling resolution to raise up to $250 million from an overseas issue of GDR/FCCB at an appropriate time. The management said details would be worked out after discussions with merchant bankers. The funds would help the company to reduce its debt burden.
Bharti Shipyard informed the exchanges that the company has won a new order from a Netherlands-based shipping company for building six multi-purpose vessels. The order is reportedly worth $66 million.
The management of SPIC has confirmed that ONGC would soon start due diligence for acquiring a stake in the company's subsidiary, SPIC Petrochemicals. With the participation of ONGC, the company is planning to revive the petrochemicals project, which is expected to cost Rs1,300 crore. SPIC is also planning to sell a part of its stake in another subsidiary, Indo-Jordan Chemicals.
KEC International has won a new order for construction of transmission lines from Power Grid Corporation of India. The order is reportedly worth more than Rs80 crore.