If the savage market fall was swift, the pull back from the depths so far is even faster. After recording the lowest closing for calendar year 2006 below 9000 on Wednesday, the Sensex has pulled back nearly 1000 points in just 2 sessions. If not for some profit booking today afternoon, the recovery would have been even more spectacular.

Yet another day of strong gains has helped erase part of the pessimism which prevailed till Wednesday. Though traders are still wary of holding on to their positions, confidence levels have somewhat improved. However, everything would depend on global cues next week.

Sensex saw a high of 10118 during the day but could not hold on to those levels in afternoon trades as traders booked profits ahead of the weekend. Nifty touched a high of 2960 before giving up part of its gains.

Sensex closed with gains of 339 points at 9885 and the Nifty gained 91 points to close at 2890. Nifty June futures ended at a premium of 20 points to the spot index.

Metal stocks were the big gainers today, led by sector heavyweight Tata Steel. The stock remained strong throughout the day and held on to its gains even in the afternoon to finally close more than 11 per cent higher. SAIL added nearly 6.5 per cent.

Sterlite was the biggest gainer among metal stocks, surging more than 20 per cent at one point and closing nearly 17 per cent higher. Aluminium stocks Nalco and Hindalco added 2 per cent each.
Metals faced stiff competition from technology stocks for market leadership. TCS surged today after underperforming its peers yesterday and closed with gains of more than 8.5 per cent.

Satyam was trading more than 11 per cent higher at one point before closing nearly 8.5 per cent higher. Wipro added 5 per cent while Infosys and HCL Tech gained 2.5 per cent each.

Among telecom stocks, Bharti built on its gains and closed more than 7 per cent higher. VSNL added 5 per cent and Reliance Communications ended 3.5 per cent higher.

HLL was another major gainer among heavyweights, closing nearly 7 per cent higher. Tata Tea added close to 5.5 per cent and ITC gained 5 per cent.

Jet Airways, one of the major losers in the market fall, bounced back nearly 6 per cent.

2-wheeler stocks, Hero Honda and Bajaj Auto added around 5.5 per cent each. Tata Motors added another 5 per cent.

ICICI Bank and HDFC Bank closed with gains of over 5 per cent each. Reliance Capital closed 12 per cent higher.

Among pharma stocks, Cipla and Dr Reddy's added 4.5 per cent each while Ranbaxy closed more than 2 per cent higher.

Index heavyweight Reliance Industries gained 5 per cent in early afternoon trades before finally closing nearly 3 per cent higher.
There were no losers among index stocks for much of the session. But by late afternoon, some of them started losing ground and slipped into the red.

ONGC, which has been subdued for the last couple of sessions, declined and dragged down the indices in afternoon trades. The stock finally closed nearly 2 per cent lower.

Glaxo was the biggest loser among index stocks, closing nearly 4 per cent lower. MTNL ended nearly 3.5 per cent lower.

Cement stocks had a weak day, led by Grasim which closed 2.5 per cent lower. ACC and Gujarat Ambuja lost over 0.5 per cent each.

HDFC gave up close to 1.5 per cent while SBI ended more than 0.5 per cent lower.

Global markets / crude oil
US markets saw one of the best single day gains yesterday after the Fed chairman sounded less concerned about inflation. Strong factory additions and an unexpected rise in job additions helped ease concerns about a major slow down in the US economy.

Continued recovery in crude oil prices helped oil stocks.

The Dow closed with gains of over 1.8 per cent and moved back into gains for the calendar year while the S&P 500 gained over 2.1 per cent. NASDAQ saw its biggest single day surge in recent years and closed around 2.8 per cent higher.

Asian markets had a spectacular day following the strong rally in the US. Indonesia was the biggest gainer in the region, closing nearly 5.5 per cent higher. South Korea added 3.5 per cent and Singapore closed 3 per cent higher.

Japanese Nikkei rallied 2.8 per cent while Thailand, Hong Kong and Shanghai closed with gains of over 2.6 per cent each.

European markets had a very firm opening with gains of well over a per cent each. They have come off their early highs and major Western European indices are trading with gains of close to a per cent each.

Crude oil prices maintained the uptrend as Iran said it is considering a proposal to avoid confrontation over the nuclear issue. Near month NYMEX futures gained close to 0.5 per cent yesterday and closed at $69.50 per barrel. The commodity is trading with marginal gains in early European trades today.

Large-cap news flow

• SAIL has come out with a revised long term business plan under which the company would invest Rs35,000 crore to increase saleable steel output from 12 million tonnes per annum at present to over 20 million tonnes by 2012.
• Indian Oil has offered a stake to Kuwaiti oil companies in its proposed $1.1 billion petrochemical unit at Panipat. Kuwaiti companies have also been offered a stake in its proposed refinery at Paradip, Orissa.
• IDFC and SBI Caps, a subsidiary of SBI, have entered into an agreement to cooperate in syndication of debt financing for the infrastructure sector.
• Wokhardt said its British subsidiary would commission a new facility to manufacture anti-diabetic cartridges.

Mid-Cap Action
Mid-caps and small caps also continued the strong pull back in line with the trend in frontline stocks. The rally was much more broad-based than yesterday with most of the stocks participating. Some of them gave up part of their gains in the afternoon and a few slipped back into the red.

The CNX Mid-Cap index rallied nearly 6 per cent at one point before finally ending with gains of 153 points, or 4.31 per cent, to end the day at 3698. Market breadth on the NSE was highly positive throughout the day.

The BSE mid-cap index gained 4.16 per cent and the BSE small cap index closed 4.54 per cent higher.

Nitco Tiles, Exide Industries and Godavari Power & Ispat all closed with gains of 20 per cent each.

Tulip IT, Aztec Software, Goetze India and Eurotex Industries closed with gains of over 15 per cent each.

Sugar stocks had a good day with Dwarikesh Sugar and Bajaj Hindustan closing 14.5 per cent each higher. Balrampur Chini, Triverni Engineering and Sakthi Sugar were among the other major gainers from the sugar sector.

Welspun Industries, Aurobindo Pharma, Geometric Software, Ansal Infrastructure, Steel Strips Wheels and Khaitan Electricals were among the major mid-cap losers.

Mid-cap news flow

• Aban Loyd would acquire a strategic on-third stake in a Norwegian offshore drilling services company. The Norwegian company has an equity valuation of $1.32 billion and enterprise value of $2.25 billion, operating a total of 8 jack-up offshore drilling rigs. It also operates 2 more rigs through subsidiaries.
• Torrent Power has formed a JV with Power Grid Corporation to build a transmission line from the 1,100 MW power plant being set up by Torrent Power Generation. The company would hold a 74 per cent stake in the Rs300 crore project.
• Glenmark Pharma has acquired the intellectual property and marketing rights of 7 drugs from a South African company for an undisclosed amount. The drugs would be initially marketed in South Africa and the company is expecting annual revenues of up to $3 million.
• Sakthi Sugars said its auto component subsidiary has acquired a majority stake in another auto component manufacturer for an undisclosed amount.
• Adlabs has entered into an agreement to finance and co-produce Hollywood movies.
• IVRCL Infrastructure has received orders worth Rs558 crore from the government of Andhra Pradesh for various irrigation projects.
• The board of SRF would meet next week to consider a share buy back.
• Hinduja TMT has set up a committee of directors to evaluate various offers for its stake in mobile telecom operator Hutchison Essar. There were media reports that HTMT has been offered up to $590 million to exit Hutch, which the company has refused to confirm.
• Jubilant Organosys has denied newspaper reports that it is in negotiations to take over a US based company.
• Nucleus Software said a leading rural bank in Philippines has selected its core banking software suite.
• Exide Industries would split its Rs10 face value shares into 10 shares of face value Re1 each.
• Srei Infrastructure Finance has decided to raise its benchmark lending rates to 11 per cent.
• Deccan Chronicle would consider an equity issue of 70 lakh shares through the QIP route besides raising Rs180 crore through sale and lease-back of printing equipment.
  

*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.

Market: Indices
National Markets
Gain (+) / Loss (-)