Indian markets are moving to a different tune with negative global cues hardly having any impact. A day after the US markets had their worst decline in months on worries of high oil prices affecting consumer sentiment, Indian markets celebrated high oil prices.
The day belonged to ONGC, which was on a roll from opening trades. The stock continued its uptrend throughout the day and closed the day with gains of close to a massive 5 per cent. Some institutional investors and large traders are buying into the stock, as higher oil prices would improve its profitability.
When the stock of the most valuable company in the country rallied, it carried other oil and oil-related stocks with it. Reliance Industries also joined the trend and closed with gains of over 2 per cent.
Technology was the other sector, which saw very good buying interest today. Frontline software stocks led by Infosys gained, adding further momentum to the markets. Infosys closed with gains of close to 3 per cent. TCS gained over 2 per cent, while Satyam and Wirpo also managed to close with gains.
The momentum took the indices to their lifetime highs by afternoon. Nifty crossed the 2400 mark for the first time ever. Both indices closed at new lifetime closing highs.
Sensex closed at 7860, a gain of 91 points, and the Nifty at 2403, a gain of 33 points. Nifty August futures closed the day at a premium of 1 point to the spot index.
ONGC, Bajaj Auto and Infosys Technologies were among the major gainers among Nifty stocks while BHEL, Glaxo and Gujarat Ambuja Cement were the major losers.
US markets had one of the worst sessions in recent months yesterday. Subdued forecast by Wal-Mart led to weakness in most other retail stocks. High fuel prices are expected to dampen consumer spending in the coming quarters. Higher energy prices are also having an impact on consumer price inflation, which rose more than expected.
The Dow and S&P 500 indices closed with losses of well over a per cent each. Good results from HP could not help the NASDAQ, which lost close to one and a half per cent.
Crude futures for September delivery remained steady yesterday, closing the day with marginal losses. The commodity closed at $66.08 on the NYMEX yesterday, down 19 cents from the previous close. Crude was trading marginally below $66 in early European trades today.
Indian ADR's could not survive the decline in US markets yesterday. VSNL was the biggest loser closing over 4 per cent lower. Tata Motors lost over 2 per cent while the banking duo, ICICI Bank and HDFC Bank, also lost over 2 per cent each. Dr Reddy's lost over a per cent each while MTNL closed marginally lower. Among the technology ADR's, Wipro and Satyam lost over a per cent each while Infosys lost over half-a-per cent.
ICICI Bank has acquired apnaloan.com, an online distributor of financial products. The bank would take over the entire operations of the company, which is one of the best-known brands in the retail distribution space. The acquisition would strengthen the bank's retail finance operations. The stock closed marginally lower.
The head of Tata Motors' passenger car division, V Sumantran, has left the company. He was instrumental in making the Indica a success and was intimately involved in the low cost passenger car being developed. The company had promoted the head of its commercial vehicles division as the managing director recently. The stock closed with gains of close to a per cent.
VSNL has signed the agreement with the government of South Africa to become the second telecom operator in the country. VSNL would hold 26 per cent stake in the operations, which would offer voice, data and limited mobility services. VSNL would have management control and operations are expected to start within 9 months. The stock closed flat.
ITC expects to finalise the location of its proposed Rs2,500 crore integrated pulp and paper project within two months. The company is evaluating various locations in the states of Andhra Pradesh, Madhya Pradesh and Gujarat. The new plant would raise the company's capacity to over 5.5-lakh tonnes per annum. The stock gained half-a-per cent.
Engineering and construction major L&T has won a new order for the construction of the new Hyderabad airport. The order is reportedly worth close to Rs500 crore. The stock closed lower by almost a per cent.
Mid-caps maintained their strength today though gains on the mid-cap index was lower than the frontline indices. The CNX Mid-Cap index closed the day at a new lifetime high of 3659, a gain of 36 points.
Vivimed Labs had a dream debut on the bourses today after its recent IPO. Issued at Rs70 per share, the stock opened at Rs131 on the NSE and saw a high of Rs225. The stock closed at Rs218, a listing gain of over 210 per cent.
Mid-cap software company Visualsoft informed the stock exchanges that it has no information about the promoter of Satyam Computers picking up a large stake in the company. An investment fund has intimated the company about a stake acquisition through open market operations.
It was revealed later in the day that Softbank of Japan has picked up a 14 per cent stake in the company at Rs127 per share from shareholders associated with the promoters.
Visualsoft had gained over 15 per cent yesterday on market rumours about the promoter of Satyam Computers acquiring a large stake in the company. Media reports had also carried the same news today. The stock closed with gains of close to 4 per cent.
3i Infotech, an associate company of ICICI Bank, denied media reports that it is close to announcing an overseas acquisition. The company stated that while it is considering acquisitions, no concrete proposal is presently before the company. The stock closed flat.
Buying in select mid-cap technology stocks continued today as well. HCL Infosystems, Aftek Infosys, Patni Computers and Kale Consultants closed with good gains.
Hindustan Construction Company, one of the largest construction firms in the country, is planning to expand its operations abroad. The company would focus on projects in the Middle East and Africa and aims to achieve 15 to 20 per cent of its revenues from overseas business. The stock closed with gains of over 4 per cent.
Buying continued in many other construction stocks today as well. Gammon India, IVRCL, Simplex, Era Construction and Unitech were among the major gainers.
Shipping logistics company Gateway Distriparks has received permission to start operations at its new container freight station at Vizag. The new facility would be custom-bonded for overseas shipments. The new facility is a joint venture between the company and a local business group.
Textile company Garden Silk Mills has started commercial production of polymer chips at a new facility in Gujarat. The new facility would have a capacity of 600-tonnes per day. After meeting its internal requirements, Garden Silk would sell the balance. The stock gained close to 10 per cent.
DCM Shriram gained after the company's board approved a bonus issue and stock split. Bonus issue would be in the ratio of one share for every share held. Also, every Rs10 share would be split into five shares of Rs2 each.
Auto ancillary company Talbros Automotive will launch its public issue to raise Rs50 crore next month. The company would use part of the proceeds to set up a new joint venture with a Japanese company.
Asian Electronics would raise Rs99 crore by issuing convertible warrants to institutional investors, promoters and employees.
Aaj Tak has lost its position as the most popular Hindi television news channel to Star News. TV Today, which owns Aaj Tak, closed flat.
TVS Motors is due to launch two new motorcycles shortly besides an upgraded version of its small scooter. The company expects to sell around 2.5 lakh units during the rest of the current financial year.
The KK Birla group is planning to invest Rs450 crore to expand the capacity of its sugar manufacturing facilities. The group has two listed sugar companies - Oudh Sugar and Upper Ganges.
Upper Ganges will set up a new sugar mill in UP with a crushing capacity of 7,000-tonnes of cane per day. The group would also increase its ethanol production capacity as well as co-generation power units. While Oudh Sugar closed with gains of over 4 per cent, Upper Ganges lost 3 per cent.
Bharat Rasayan, Crest Animation and BSEL Infrastructure were among the best performing stocks among mid-caps.
Kirloskar Oil Engines, Morarjee Realty and Ginni Filaments were among the significant mid-cap losers.
*Disclaimer: The author does not have any position in the stocks specifically mentioned above at the time of writing this article. This analysis / report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content the author or publisher shall not be held responsible for any loss caused to any person whatsoever.