On the last day of the February series in the F&O segment, some volatility was expected in the markets especially since F&O volumes have gone up considerably. However, the indices were not volatile as expected.

Markets opened on a strong note and both the frontline indices recorded new lifetime highs in early trades. The Sensex crossed the 10300 mark briefly in early trades before giving up a small part of its gains.

The markets held firm till late in the afternoon when a sudden bout of selling saw the indices decline fast. Both the Sensex and Nifty gave up a significant part of their gains and closed the day with modest gains.

The Sensex posted a new lifetime intra-day high of 10305 while the Nifty saw a new high of 3078. Both indices closed at new lifetime closing highs today.

Steel stocks opened firm and maintained their up trend throughout the day. SAIL saw a sharp surge in afternoon trades and closed with gains of more than 6 per cent. Tata Steel added close to 2 per cent.

There are reports that international steel prices have firmed up in the last couple of weeks and there is market speculation that domestic steel manufacturers would announce price hikes shortly.

Bajaj Auto continued it's uptrend and added another 3 per cent today. The stock has been on a steady up swing for the last few weeks on expectations of a de-merger of its investments division. Bajaj Auto's main competitor in the two-wheeler market, Hero Honda closed nearly 2 per cent higher.

HLL made a come back after remaining subdued for a few sessions. The stock added close to 2.5 per cent. ITC closed nearly 1.5 per cent higher while Dabur added over a per cent.

Zee Tele saw some action in afternoon trades on speculation that Nimbus, the winner of cricket telecast rights, would rope in Zee for joint production or management of the rights. The stock closed more than 2.5 per cent higher.

ONGC added close to 2 per cent and helped the Nifty go past its early highs in the afternoon.

SCI closed nearly 3 per cent and was the biggest loser among index stocks.

Grasim also gave up close to 3 per cent despite reports that cement prices have firmed up this month.

Telecom stocks MTNL and VSNL lost 2 per cent each on concerns that the new ADC regime announced by TRAI would affect the companies.

Ranbaxy gave up more than 2.5 per cent, giving up most of yesterday's gains.

Jet Airways came under a fresh bout of selling pressure and closed more than 2 per cent lower.

ABB, IPCL, Hindalco and SBI were the other major losers among index stocks.

Sensex closed at 10244, a gain of 20 points, and the Nifty closed higher by 11 points at 3062. Nifty March futures closed at a discount of 8 points to the spot index.

US markets rallied yesterday after data showed lower inflation, easing concerns about higher interest rates. The drop in crude oil prices also hlped market sentiment.

The Dow gained around two-thirds of a per cent while the S&P 500 ended three-fourths of a per cent lower. The NASDAQ index gained more than a per cent as technology stocks came back strongly from Tuesday's losses.

The positive closing by US indices yesterday helped most Asian indices in today's trade. Most major Asian indices led by Japan and South Korea ended the day with strong gains. The Japanese Nikkei closed above the 16000 mark today.

After rallying for three straight sessions, crude prices dropped nearly 3 per cent yesterday on expectations of a further rise in US crude inventories. April futures on the NYMEX closed at $61.01 per barrel yesterday. The commodity is trading below $61 per barrel in early European trades today.

Bharti would pass on the reduction in ADC announced by TRAI to customers. The company said the new regime would increase volumes because of the reduction in call charges. Bharti also said the removal of ADC by 2008-09 would be a positive for the industry.

JSW Steels has increased galvanised steel prices by up to Rs1,750 per tonne. The company said the hike would help offset the rise in zinc prices and transportation costs.

Media reports suggest that Indian Oil would join hands with Sinopec of China for joint sourcing of crude oil. The two companies are reportedly considering a special purpose vehicle for joint purchase of Middle East crude.

Mid-Cap Action

Mid-caps were subdued even in early trades when the frontline indices were seeing new highs. The mid-cap index could not hold on when the frontline stocks gave up their gains in the afternoon and slipped into the red. The CNX Mid-Cap index lost 13 points to end the day at 4333.

Clutch Auto would acquire a US based quasi-manufacturing and distribution company by early next month for an undisclosed sum. The company said the acquisition would add additional revenues of Rs54 crore for the next year. The company expects after tax profits of Rs23.5 crore over the next fine years.

Nagarjuna Constructions has won three new orders worth a total of Rs243 crore. The orders are for various construction work at power stations and water supply projects.

Hikal has entered into an agreement with a German company to supply drug intermediates and active pharma ingredients to global buyers. Financial details of the deal have not been disclosed.

Gateway Distriparks has received in principle approval from the Railways for operating freight trains.

Garware Shipping has contracted to buy an offshore platform supply vessel which is expected to be delivered by next year.

Inox Leisure got listed on the exchanges today. Issued at Rs120, the stock opened at Rs172 on the NSE and saw a high of Rs194.80. The stock saw some selling pressure late in the afternoon and closed at Rs175.25, a gain of more than 46 per cent to the issue price.

Uttam Galva, Venkey's India and Zenith Computers were among the significant mid-cap gainers on the NSE.

Flex Industries, Rain Calcining and Shreyas Shipping 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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