Weak trend across most Asian and European markets and more flooding in Mumbai could not dampen market sentiment today as the indices rallied strongly. Steel, cement, private banking and engineering stocks led the rally today.

Markets opened on a subdued trend following weakness in most Asian markets. The indices soon recovered and by mid-morning they were trading with gains of well over a per cent each.

The uptrend continued in the afternoon though profit booking pulled down the indices for a brief while. They recovered once again and surged ahead in the last hour to close near the day's highs. Sensex crossed 10900 and Nifty went past 3200 in the closing minutes.
Sensex closed with gains of 257 points at 10919 and the Nifty added 58 points to close at 3197. Nifty July futures ended at a discount of 27 points to the spot index.

Tata Steel surged ahead before noon as reports of a preferential issue came in. The stock finally closed with gains of nearly 5 per cent. SAIL added nearly 3 per cent.

Suzlon Energy surged in afternoon trades and added another 7 per cent to become the best performer among index stocks. The stock has gained more than 20 per cent in the last few sessions.

Among other engineering and capital goods stocks, ABB gained over 4 per cent while L&T ended nearly 4 per cent higher.

Reliance Industries added nearly 2 per cent but ONGC gave up most of its gains and closed with gains of over 0.5 per cent.

HDFC sustained its up trend and added more than 4.5 per cent today while HDFC Bank gained 2.5 per cent. ICICI Bank closed with gains of nearly 2 per cent.

Grasim was the big gainer among cement stocks, closing nearly 5 per cent higher. Gujarat Ambuja added more than 3.5 per cent and ACC ended more than 2.5 per cent higher.

Reliance Energy had an excellent session and gained almost 5.5 per cent while Tata Power added more than 2.5 per cent.

FMCG stocks recovered from yesterday's correction and rallied ahead. HLL added nearly 4 per cent while ITC gained over 3 per cent. Dabur closed with gains of over 2 per cent.

Among other major gainers, VSNL and Zee Tele also added nearly 4 per cent each.

There were only 5 losers among Nifty stocks today. Gail and M&M were the biggest losers among index stocks, closing nearly a per cent each lower.

Wipro and Nalco also lost nearly a per cent each while SBI ended with marginal losses.

Global markets / crude oil
US markets were closed yesterday for Independence Day holiday and would resume trading today.

Asian markets were generally weak today following missile tests by North Korea. The tests, despite warnings from US and Japan, may lead to rising tensions in the region. Thailand was the biggest loser, closing nearly 2 per cent lower. Singapore lost a per cent and Japan ended 0.75 per cent lower. Hong Kong declined 0.6 per cent and South Korea gave up nearly 0.5 per cent.

Among the gainers, Shanghai added more than 2 per cent while Indonesia and Malaysia ended with marginal gains.

North Korean missile tests have affected sentiment in Europe as well. Major indices are trading with losses of nearly 0.5 per cent each.

Large-cap news flow

• Tata Steel would make preferential allotment of 2.7 crore equity shares to Tata Sons at a price of Rs516 per share to raise Rs1,393 crore. The company would also issue 2.85 crore convertible warrants to Tata Sons, which would be convertible after 01 April 2007. Tata Sons would pay Rs51.6 per warrant on allotment and the conversion price would be fixed later.
  
• Tata Steel AGM has also approved raising of long term funds of up to Rs6,500 crore during the current financial year, including the preferential allotment to Tata Sons.
  
• Gujarat Ambuja Cements has extended its financial year by 6 months to end on 31 December 2006. From next year onwards, the company's financial year would be from January to December. The change in financial year is to align financial reporting of the company to that of its largest shareholder Holcim.
  
• Jet Airways would revise the fuel surcharge to Rs500 per ticket from 07 July to set off higher fuel costs.
  
• Satyam Computer would implement an infrastructure lifecycle management project for the Dubai municipality. Financial details of the project have not been disclosed.
  
• OBC would raise Rs500 crore from an issue of 15-year Tier-II bonds carrying an interest rate of 9.25 to 9.75 per cent.

Mid-Cap Action
Mid-caps and small caps are still not able to regain the momentum, despite modest gains on the smaller indices. Though select stocks are attracting interest, most others remain weak and have not recovered much from the lows touched last month. Even today, the smaller stocks underperformed the large caps by a wide margin.

The CNX Mid-Cap index ended with gains of 43 points, or 1.07 per cent, to end the day at 3983. BSE mid-cap index gained 0.81 per cent and the BSE small cap index ended with gains of 0.44 per cent today.

Xpro India, Repro India, Apollo Tyres, Tata Investment Corp, IndiaBulls, Marico, Hyderabad Industries and Jai Balaji Sponge were among the mid-cap gainers.

KCP Sugar, Excel Industries, Hikal, Sintex, GM Breweries, Shree Renuka Sugars, Easun Reyroll and Phoenix Lamps were among the major mid-cap losers.

Mid-cap news flow

• Godrej Consumer has acquired the South African hair colour business of British company Rapidol as well as its subsidiary Rapidol International for an undisclosed amount in an all-cash deal. The acquired businesses have combined revenues of around Rs33 crore per annum. The acquisition would bring two major African brands and an extensive marketing network across Africa under the Godrej fold.
• WHO has granted approval for another anti-HIV drug marketed by Strides Arcolab, taking the total number of WHO approved HIV drugs to five.
• The board of Allianz Capital would meet this week to consider a preferential issue of equity shares to promoters.
• The board of Magma Leasing would meet tomorrow to consider preferential issue of securities.
• Tulip IT has received the letter of intent from the department of telecom for starting domestic and international long distance (NLD & ILD) services.
  

*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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