Yet another volatile day in the market as the indices are trying to get a sense of direction on mixed signals. The results season is ahead of us and the market is cautiously optimistic. However, global cues in the form of oil prices and investment flows continue to cause a few worries.

After opening firm the indices declined soon to touch the lows of the day before noon. Early afternoon, the indices bounced back into positive territory only to give up and close in the red. Sensex closed at 6550, down 54 points and the Nifty at 2053, down 11 points.

Among index stocks, Tata Chemicals, ONGC and Bajaj Auto were the biggest percentage gainers while Tata Motors, Maruti and Gujarat Ambuja were the top losers.

On Monday, US markets bounced back from early losses to close with reasonable gains. Declining oil prices and news of large mergers helped turn around the sentiment. Insurance giant AIG, facing regulatory investigations, bounced back on news of a possible settlement. Oil giant Chevron-Texaco announced acquisition of smaller rival Unocal for $16.4 billion. There is also speculation about a possible bid by HSBC to acquire investment bank Morgan Stanley. Morgan Stanley is facing severe internal management issues with many top executives leaving.

Oil touched a new high of $58.28 in morning trades before declining and closing at $57.01 to a barrel. OPEC has indicated that it is willing to increase production by half a million barrels a day to cool prices.

Telecom major Bharti Tele announced plans to invest around $850 million in the current year for expansion. A large part of the proposed investments will be spent on mobile services. The company is not planning to raise fresh equity. The stock recovered from its morning losses on hearing this announcement.

Indian Oil announced a price hike of Rs5,000 per kilolitre for aviation fuel. Jet Airways, the only listed operational airline, lost two per cent on this news early in the morning. Fuel forms a substantial part of an airline's operating costs and prices have gone up by more than 50 per cent from last year's levels.

HPCL announced plans to invest up to Rs1,300 crore to increase capacity of its Mumbai oil refinery. The company is also expanding the capacity of its Vizag refinery and has offered a stake to Saudi Arabian oil company Aramco in the Vizag project.

Larsen & Toubro is joining hands with Dubai Aluminium to set up an alumina refinery in the state of Orissa. The project which would also include a bauxite mining unit is expected to cost Rs5,000 crore.

ICICI Bank touched a new all time high of Rs429.50 before closing almost 2 per cent up at Rs425. BHEL and HCL Tech also gained in a weak market.

Power stocks Reliance Energy and Tata Power were weak today as also banking majors SBI and HDFC Bank.

Mid-cap action
Jubilant Organosys announced acquisition of a US based generic pharma company for $8.25 million. The target company reportedly has 5 approved drugs and has filed applications for more drug approvals. Jubilant will pay cash for the acquisition and is looking to invest an additional $12 million in the US company.

Construction companies keep on announcing new project orders almost every day. Today, a consortium of Hindustan Construction announced and Nagarjuna Construction announced a huge order for an irrigation project worth Rs1,887 crore. Hindustan shot up more than 8 per cent and Nagarjuna by 2 per cent in early morning trades.

Hindustan Oil Exploration was the biggest gainer among mid-caps with a gain of 20 per cent. The stock is attracting buying interest on rising crude prices and the company's reserve estimate of 40 million barrels of crude.

Rain Commodities gained more than 7 per cent on news of a warrant issue to a subsidiary of Citibank. The company, previously called Priyadarshini Cement, is the holding company of Rain Industries, which is a regional cement player in the state of Andhra Pradesh.

Dwarikesh Sugar said it would spend up to Rs150 crore to acquire sugar mills in the state of Uttar Pradesh. The company is looking at 3 mills with a crushing capacity of 5,000 tonnes of cane per day.

Allahabad Bank was the single biggest loser among mid-caps with losses of over 7 per cent. The bank announced the price band for its public issue between Rs75 to Rs82. The market was speculating a price of around Rs90 based on some statements issued by the bank management. The steep discount of the offer price to current market price led to large scale unloading of the stock. Yet another reminder for retail investors not to jump into the ring based on market speculation.

Other mid-cap public sector banks were also lost substantial ground. Bank of Baroda, Indian Overseas Bank, Bank of India and Union Bank all lost between 3-5 percent.

IL&FS Investment, South East Asia Marine, Zodiac JRD and Jindal Drilling were among the major mid-cap gainers for the day.

SB&T International, Suryalakshmi Cotton, Pantaloon Retail and Crest Animation were among the major mid-cap losers.

Market: Indices

National Markets
Gain (+) / Loss (-)