The trend of alternate days of buying and selling continued today as well as the markets are still searching for a clear direction. While there are no big developments to help the indices go past the previous highs decisively, stocks are attracting buying interest on every decline.

The decline of the rupee is helping the indices as technology stocks, major beneficiaries of a weak rupee, have been firm over the last few days. The rally in ONGC is also helping the indices considerably.

After opening with decent gains, the indices held on till mid-morning when news of FII selling in the derivatives segment yesterday led to weakness. Buying in technology and banking stocks and heavyweights like ONGC and Reliance saw the indices surge in early afternoon trades.

Indices traded within a range for most of the afternoon session and a bout of late buying saw them close at the highs of the day. The Sensex crossed the 8900 mark in closing trades, though averaging brought down the closing level below that mark.

ONGC maintained its uptrend from yesterday as oil prices are back above the $60 mark. Expectations of a high interim dividend and some overseas deal announcements are also helping the stock. ONGC closed the day with gains of over 2.5 per cent.

Reliance Industries gained close to a per cent and added strength to the indices. Reliance Energy added more than 2.5 per cent.

TCS was the best performer among technology stocks, closing more than 2.5 per cent. Satyam and Wipro added around 2 per cent each while Infosys closed marginally higher.

FMCG stocks had a good day and Dabur was the best performer from the lot. The stock added more than 4 per cent, making it the best performing index stock. HLL and ITC also added well over a per cent each.

Banking stocks were helped by the strong interest among overseas investors for the ICICI Bank issue. ICICI closed more than 2 per cent higher while HDFC Bank added close to 2 per cent. SBI recovered from yesterday's losses and closed more than half a per cent higher.

Cement stocks made an attempt at recovery part of their losses from recent days, but closed with marginal gains. Grasim, ACC and Gujarat Ambuja all closed marginally higher.

Auto stocks made a come back led by Tata Motors which added more than 2 per cent. The two-wheeler pack was led by Hero Honda, which closed more than 2 per cent higher.

Weakness continued in oil marketing and engineering stocks. BPCL and HPCL lost more than a per cent each. Among the engineering stocks, BHEL, ABB and L&T closed nearly a per cent each lower.

Sensex closed at 8896, a gain of 81 points, and the Nifty at 2693, higher by 31 points. Nifty December futures closed at a premium of 2 points to the spot index.

Dabur, MTNL and Shipping Corporation of India were the major gainers among Nifty stocks while BPCL, HPCL and Hindalco were the major losers.

Better than expected gains in productivity for the third quarter helped US markets to close higher yesterday. Higher productivity has led to a decline in labour costs which would in turn ease inflation expectations. Positive outlooks from some leading brokerages on technology stocks like IBM and Apple also helped the markets.

The Dow closed one-fifth of a per cent higher. The S&P 500 and the NASDAQ gained more than one-tenths of a per cent each.
Crude oil closed marginally higher yesterday ahead of the release of US weekly inventory data today. January crude futures on the NYMEX closed at $59.94 yesterday. The commodity is trading higher by half a per cent above the $60 mark in early European trades today.

ICICI Bank has priced its public issue, which closed yesterday at Rs525 per share. Retail investors would be allotted shares at Rs498.75. The ADR offering has been priced at $26.75, one ADR being the equivalent of two equity shares. The ADR's have been priced at a premium of more than 15 per cent to the domestic price.

ICICI Bank's issue received good response from institutional investors and overseas investors. The issue was subscribed over seven times with strong interest from registered FII's. However, the response from retail investors was more subdued. Total bids from small investors were only around 50 per cent of the amount reserved for them.

TCS has announced that it has entered into a partnership with global ERP major SAP of Germany to offer manufacturing solutions to global customers. The companies would offer solutions on a newly launched SAP platform for manufacturing businesses.

News agency reports indicate that SAIL is planning to invest Rs11,000 crore to expand capacity at its plants in West Bengal over the next five years. The company would enhance hot metal capacity by nearly 3-million tonnes and finished steel capacity also by nearly 3-million tonnes per annum. SAIL had earlier announced investment plans worth around Rs35,000 crore over the next five years.

Nestle India has announced an interim dividend of Rs18 per share and the stock surged more than 5 per cent to a new lifetime high.

Mid-Cap Action

Mid-cap stocks once again underperformed the frontline stocks as buying is very selective. Momentum buying is clearly absent in mid-caps even on days when the frontline indices add more than a per cent. The CNX Mid-Cap index added 21 points, or half a per cent, and closed the day at 3893.

Gujarat Heavy Chemicals has informed the exchanges that it would acquire a soda ash manufacturer based in Romania. The all cash deal would cost the company $19.5 million. The company said the acquisition would take its total soda ash capacity to 0.9 million tonnes per annum. GHCL is also said to be in talks to acquire a US-based company for $100 million.

I-Flex has informed that Oracle would start reselling one of its banking software products to customers worldwide. The product is designed to help banks and financial institutions to manage complex regulatory requirements like the proposed Basel II norms. Oracle is the majority shareholder in I-Flex.

Lupin Labs has announced that it has completed its FCCB issue and has raised $100 million. The bonds are convertible after a period of 5 years at a 50 per cent premium to the current market price. The bonds would be listed on the Singapore Stock Exchange.

Lyka Labs has also completed an overseas issue and has raised $5 million. The company has issued GDR's priced at $6.25, each GDR representing 5 equity shares.

Textiles and garment manufacturer S Kumar is planning to invest Rs140 crore to expand fabric and garment manufacturing capacity. The company informed the exchanges that it is also planning to expand its retail network to 200 exclusive showrooms over the next 3 years.

Newspaper reports indicate that Nirma Limited has gained management control of Shree Rama Multitech. Nirma had acquired a 25-per cent stake in Shree Rama earlier this year. The company is one of the leading manufacturers of plastic laminated tubes used in the packing of products like tooth paste.

Indraprastha Gas, region promoted by BPCL and GAIL, and the only distributor of CNG in Delhi, has entered into an agreement for higher natural gas supplies from GAIL. This would enable Indraprastha Gas to service more regions close to Delhi.

Westinghouse of UK has announced that it would enter into a multi-million dollar purchase contract with Asian Electronics, a leading manufacturer of household electrical fittings.

Pantaloon Retail has reported a more than 50 per cent increase in sales for the month of November as compared to the same month of last year.

TVS Electronics, IVP Limited and Mercator Lines were among the significant mid-cap gainers on the NSE.

Media Video, Rajasthan Spinning and Blow Plast were among the significant mid-cap losers on the NSE.

*Disclaimer:The author may have positions in some of 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.

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