The much-anticipated listing of RPL failed to cheer the markets as profit booking in heavyweights, including Reliance Industries, led to a substantial decline. Indices were volatile today because of significant news flow from the political front.

Markets opened with gains and the indices saw new intra-day lifetime highs in early trades. Sensex touched a new lifetime high of 12671 today while the Nifty set a new high of 3774.

But they slipped soon after opening and by mid-morning the Sensex had lost more than 140 points. A recovery took the indices very close to yesterday's closing levels by mid-afternoon.

The last hour saw heavy selling in heavyweights like Reliance Industries, ONGC, Tata Steel and SBI. The Sensex slipped more than 200 points while the Nifty lost more than 60 points before a mild recovery in the closing minutes.

Sensex closed with losses of 177 points at 12435 and the Nifty lost 53 points to close at 3701. Nifty May futures closed at a discount of 14 points to the spot index.

The listing of Reliance Petroleum went on expected lines, but the closing price would have disappointed most traders. The stock opened at Rs99.95 on the NSE against an issue price of Rs60 and went on to touch a high of Rs105.

RPL declined from those levels to below Rs90 and maintained a steady trend till afternoon. After re-testing Rs90, the stock declined again in late trades to close at Rs85.4.

Though some profit booking was expected in Reliance Industries, a 5 per cent fall was too steep - especially on RPL's listing day. The stock had surged over the last couple of weeks on considerable news flows, but mostly in anticipation of the RPL listing.

Reliance Industries opened weak and slipped more than 4 per cent by mid-morning. The stock recovered part of its losses in the afternoon before declining again. It finally closed with losses of more than 5 per cent. IPCL ended nearly 3.5 per cent lower.

ONGC, another major gainer earlier this week, lost nearly 2 per cent. Among other stocks in the oil & gas sector, BPCL lost more than 3 per cent. HPCL ended nearly 2 per cent lower while Indian Oil lost more than 1.5 per cent.

Tata Steel saw a sharp fall in late afternoon trades and closed nearly 4.5 per cent lower after the management denied speculation about a rights issue. SAIL lost nearly 0.5 per cent.

PSU banking stocks, among the major gainers in recent sessions, came under profit booking. SBI lost more than 2.5 per cent while PNB ended nearly 3 per cent lower.

MTNL, Reliance Energy and Grasim were among the other losers.
VSNL was the biggest gainer among index stocks on reports of a proposed consolidation of telecom companies in the Tata group. The stock closed nearly 2.5 per cent higher.

Hindalco added more than 1.5 per cent as copper prices are continuing the rally. Reports that its subsidiary would be listed on the Australian stock exchange also supported the stock.

HDFC, Dabur, SCI and Wipro were among the other gainers.

Global markets / crude oil
US markets were weak yesterday after the Fed raised short-term rates by 25 basis points. Indications from the Fed that it would continue raising interest rates if economic growth remains strong and inflation rises, disappointed the markets. Technology stocks were weak on subdued guidance from more technology companies.

The Dow closed with very marginal gains while S&P 500 index closed nearly 0.2 per cent lower. NASDAQ continued its decline and closed with losses of three-fourths of a per cent.

Asian markets were once again mixed following the US rate hike announcement. The Japanese index declined further and lost another 0.5 per cent while Shanghai lost 0.5 per cent after gaining more than 7 per cent in the last 3 sessions. South Korea added a per cent while Hong Kong closed 0.3 per cent higher.

Crude oil prices gained over 2 per cent yesterday on data showing rising demand for petrol. As per the weekly data released yesterday, rise in US inventory of refined products were much higher than expected. But this did not have any effect on prices.

eports of refinery shutdowns in the US supported the rally further. Near month NYMEX futures closed higher by $1.44 at $72.13 per barrel yesterday. The commodity is trading with gains of over 0.5 per cent in European trades today.

Large-cap news flow

• MTNL has been awarded the license to operate National Long Distance services. The company has signed an agreement with the telecom department for the license. Own NLD operations would help the company to save costs substantially.
• There are unconfirmed media reports that the Tata group is planning a merger of its telecom companies. The reports suggest that listed entities VSNL and Tata Teleservices Maharashtra would be merged with unlisted company Tata Teleservices.
• cephalosporin plant has received US FDA approval.
• SBI would raise Rs500 crore as Tier II capital through issue of subordinated bonds of 5-year maturity.

Mid-Cap Action
Mid-caps also corrected today as most of the recent gainers came under heavy selling pressure. The fall gathered momentum in late trades along with the frontline stocks. The CNX Mid-Cap index lost 64 points, or 1.21 per cent, to end the day at 5258. Market breadth was very weak on the NSE.

Kamdhenu Ispat, a new listing this week, was locked in 20 per cent upper circuit today as well. The stock has gained nearly 160 per cent from its issue price in 3 sessions.

India Infoline, Adani Exports, Ruby Mills and KLG Systel all closed in their upper price circuits. Patel Engineering, Rajvir, Astra Microwave and Onward Technologies were among the other mid-cap gainers.

Tea plantation stocks came under selling pressure today. Williamson Magor and McLeod Russel were among the major losers.

VLS Finance, Sunil Hitech, Malwa Cotton, MRPL and Bindal Agro were among the significant mid-cap losers on the NSE.

Mid-cap news flow

• Amtek Auto would raise $250 million from a FCCB issue. The 5-year bonds are convertible at a price of Rs458.64 per equity share.
  
  
• Triverni Engineering would de-merge its steam turbine and industrial gears business into a separate entity. The details of the de-merger would be announced later.
  
  
• Varun Shipping has filed a draft prospectus in Singapore ahead of the proposed issue of Singapore Depository Receipts.
  
  
• The board of Voltas has approved a stock split in the ratio of 10 shares of Re1 each for every Rs10 share.
  
  
• Era Constructuions has won a new contract worth Rs62 crore from Rail Vikas Nigam for construction of a railway line.
  
  
• Nectar Lifesciences has made regulatory filings in the US and Europe for cephalosporin in oral form.

*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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