As expected, markets opened on a weak note on subdued global cues. Most Asian markets were trading with significant losses after a correction in the US yesterday. The indices declined well over 2 per cent each in early trades.

However, the sentiment improved as the day progressed and Asian markets recovered from their lows. Domestic indices traded within a band with losses of around 0.7 per cent each till late afternoon.

The last hour saw a major rally in index heavyweights ONGC and Reliance Industries. Steel stocks also surged, pushing the indices further up. Both frontline indices recovered all their losses and rallied to close with significant gains.

Sensex closed with gains of 125 points at 10401 and the Nifty gained 48 points to close at 3043. Nifty June futures ended at a premium of 23 points to the spot index.

The late afternoon rally was led by index heavyweights Reliance Industries and ONGC. Reliance Industries was trading with modest gains for most of the session before surging ahead and closing nearly 4 per cent higher. The stock closed above Rs1,000 after a gap of nearly 2 weeks.

ONGC rallied after lying low till afternoon and closed 3.5 per cent higher. Gail ended with gains of over 4 per cent.

Steel stocks surged on reports of a possible peaceful merger between Mittal Steel and Arcelor. SAIL was the biggest gainer among index stocks, closing more than 6.5 per cent higher. Tata Steel added more than 4.5 per cent.

Ranbaxy saw considerable buying interest and ended nearly 4 per cent higher.

Wipro was the big gainer among tech stocks, closing moer than 4 per cent higher. Satyam added 2.5 per cent and Infosys closed nearly 1.5 per cent higher. TCS ended more than a per cent higher.

HDFC Bank bucked the weak trend in banking stocks and closed 2.5 per cent higher.

Tata Tea and SCI were among the other major gainers.

Banking stocks came under profit booking after yesterday's spectacular gains. PNB was the biggest loser among index stocks, closing more than 3 per cent higher. SBI lost nearly 1.5 per cent while ICICI Bank ended nearly a per cent lower.

HDFC gave up more than 1.5 per cent after gaining 10 per cent yesterday.

Jet Airways slipped nearly 2 per cent as the company initiated legal proceedings to settle the failed Air Sahara deal.

Hero Honda, Nalco, HPCL, L&T and Reliance Energy were among the other losers.

Global markets / crude oil
US markets declined yesterday after the previous day's spectacular rally on fresh concerns of a slow down in the economy. The Dow and S&P 500 indices ended with losses of nearly 0.5 per cent each. Technology stocks were worse off and the NASDAQ lost more than 0.8 per cent.

Asian markets had a weak opening but many of them recovered later in the day. Indonesia was the biggest loser, closing a per cent lower. South Korea ended more than 0.8 per cent and Singapore lost 0.7 per cent. Japan and Hong Kong closed with modest losses.

Malaysia and Shanghai closed with modest gains.

European markets opened with modest gains, but have failed to sustain the up trend. Major Western European indices are trading with modest losses of around 0.2 per cent each.

Crude oil prices gained further yesterday and near month NYMEX futures settled 51 cents higher at $70.84 yesterday. The commodity is trading with losses of 50 cents in early European trades today.
Large-cap news flow

• Jet Airways said the company has filed a petition before the Bombay High Court against the Sahara group under the Arbitration Act. Jet also said the Sahara group has in turn filed a petition in a Lucknow Court against the company and ICICI Bank.
  
  
• VSNL has completed the acquisition of internet service provider Direct Internet and its subsidiary Primus Telecommunications for Rs75 crore.
  
  
• Oriental Bank of Commerce is planning a life insurance foray and is scouting for a partner.
  
  
• Merger between Reliance Capital and Reliance Capital Ventures has been approved by the High Court.
  
  
• Gail India and Videocon Industries would co-operate in bidding for oil exploration blocks, both domestically and internationally.

Mid-Cap Action
Mid-caps were also weak for most of the session before recovering and closing with gains towards the end of the day. Small caps were better off and the BSE Small cap index crawled into the green even before noon.

The CNX Mid-Cap index ended with gains of 15 points, or 0.38 per cent, to end the day at 3974. Market breadth on the NSE was negative for most of the session, but recovered later in the afternoon.

BSE mid-cap index gained 0.11 per cent and the BSE small cap index maintained it's up trend with gains of 0.74 per cent today.

Amar Raja Batteries closed on the 20 per cent upper circuit today. REI Agro closed at the 10 per cent upper circuit today after the circuit filter was reduced from 20 per cent to 10 per cent.

HMT and ITI rallied today as well on hopes of disinvestment by the government. HMT added 13.5 per cent and ITI closed more than 11 per cent to take total gains over the last 2 sessions to around 25 per cent each.

Cosmo Films, R Systems, Shreyas Shipping and TV Today were among the other mid-cap gainers.

Honda Siel, Pudumjee Pulp, Indraprastha Medical, TTK Prestige, Bajaj Auto Finance and Aarti Drugs were among the major mid-cap losers.

Mid-cap news flow

• Lupin has received the final US FDA approval for a hyper-tension drug in tablet form. Market size for the patented drug in the US is around $300 million per annum.
  
  
• The board of SRF has approved a share buy back scheme at a price not exceeding Rs250 per share. The scheme would be open for one year and total value of the buy back would not exceed Rs35 crore.
  
  
• Genus Overseas has dropped plans for preferential issue of equity shares and warrants.
  
  
• Ciba Speciality has completed the acquisition of 51-per cent stake in Virchow Drugs for Rs8.3 crore.
  
  
• Four Soft has signed an agreement with a UK-based company, which holds the license for certain software products.
  
  
• Sanwaria Agro is considering an entry into processing and export of rice.
  
  
• JK Lakshmi Cement would raise a total of Rs75 crore from preferential issue of equity shares and convertible warrants to a promoter group company. The issue price would be Rs97.5 per share.
  
  
• Shringar Cinema would launch its new multiplex at Surat today, taking the total number of screens operated by the company to 30.
  
  *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.