The last day of September F&O series was relatively volatile as the markets saw alternate bouts of buying and selling. However, very strong gains for the banking stocks and positive trend across Asia held the indices up.

Indices opened the day with modest gains but slipped soon after. They moved sideways till noon before starting a rally which took them to their intra-day highs in early afternoon trades.

There was higher volatility in the afternoon as the indices gave up all their gains. The Nifty slipped deep into the red while the Sensex held around yesterday's closing levels.

Sensex closed with gains of 14 points at 12381 and the Nifty lost 7 points to close at 3572. Nifty October futures closed at a premium of 12 points to the spot index.

Banking and financial stocks rallied for the third straight session has hopes of declining interest rates strengthened. Most bankers talking to the media were confident that the risks of further rate hikes have subsided considerably. The Bank Nifty was the best performing sectoral index, rallying nearly 4 per cent.

Oriental Bank continued its gravity-defying act today as well and soared more than 7 per cent. The stock has been the best performer among banks over the last few weeks.

PNB surged nearly 4 per cent while HDFC and HDFC Bank ended with gains of around 3.5 per cent each. ICICI Bank rallied over 3 per cent to settle above Rs700 per share for the first time ever. SBI also gained nearly 3 per cent.

Among tier-II banks, Union Bank, UTI Bank, Bank of India and Bank of Baroda all gained around 6.5 per cent each. Kotak Mahindra gained close to 6 per cent while Canara Bank added more than 5 per cent.

Nalco was the best performer among metals, adding nearly 4.5 per cent

Tata Power added nearly 3.5 per cent on news flows about new power ventures.

M&M added over 1.5 per cent after announcing an acquisition in Germany while Ranbaxy rallied close to 2.5 per cent on sustained rumours of an acquisition.

Oil marketing stocks came under pressure as oil prices staged a recovery. HPCL was the worst performer, losing nearly 3.5 per cent while BPCL gave up close to 1.5 per cent.

Index heavies Reliance Industries and ONGC lost around 0.5 per cent each.

Among other oil and gas stocks, Gail India lost nearly 2 per cent.

Jet Airways was also hit by higher crude prices and lost nearly 3 per cent.

Maruti gave up all its gains from yesterday and closed more than 2 per cent lower.

Dr Reddy's continued to decline and lost well over 2 per cent.

TCS was the worst performer among tech stocks, losing more than 2 per cent. Satyam gave up well over 1.5 per cent.

Among other major loser, Dabur gave up nearly 2 per cent and Reliance Communications shed over 1.5 per cent.

Global markets / crude oil
US markets sustained the up trend yesterday and major indices hit multi-year highs. Data released yesterday showed an unexpected rise in new home sales for the month of August and helped ease concerns about a housing market slump.

The Dow gained more than 0.15 per cent while S&P 500 ended with very marginal gains. The NASDAQ index ended close to 0.1 per cent higher.

Asian markets continued the rally today as well and ended with good gains. South Korea added nearly 0.85 per cent while Indonesia and Shanghai ended with gains of around 0.7 per cent each. Japan added close to 0.5 per cent and Singapore closed with gains of nearly 0.4 per cent. Malaysia and Hong Kong ended with modest gains.

Thailand was the only loser, declining nearly 0.75 per cent.
Most European markets opened with very marginal losses before recovering in early afternoon trades. London is the best performer, gaining more than 0.5 per cent.

Crude oil prices gained yesterday as traders built long positions after the sharp decline in recent weeks. Near month NYMEX futures gained nearly $2 per barrel to settle at $62.96 yesterday. The commodity has gained modestly and is trading above $63 per barrel in European trades today.

Large-cap news flow

• M&M would acquire a majority stake in a German forgings company for an undisclosed amount. The German company manufactures gear boxes, engine and axle plans, hubs, gears and piston heads for buses, trucks and trailers. The company has posted revenues of €180 million for the year 2005.
  
• Wipro has acquired a Swedish manufacturer of hydraulic components for $31 million in an all-cash deal. The Swedish company manufactures components for construction and material handling equipment and commercial vehicles with revenues of $112 million in 2005. The acquired company is profitable with positive cash flows.
  
• HCL Infosystems has entered into an agreement with Casio for marketing and servicing of digital cameras.
  
• IDFC is planning to invest up to $400 million in unlisted infrastructure development companies, according to media reports.
  
• JSW Steel is planning to set up 3 new steel plants of 10 million tonnes capacity each in the states of Orissa, West Bengal and Jharkhand by 2020. The company would invest around Rs25,000 crore in each of these plants and is also planning to acquire coal mines abroad.
  
• Promoters of Reliance Industries have raised their stake by 2 per cent through the creeping acquisition route. Promoters' stake in the company now stands at over 50 per cent.
  
• SBI's associate banks are planning to raise up to Rs3,000 crore over the next 3 years to augment their capital base.

Mid-Cap Action
Mid-caps and small caps outperformed the large caps by a wide margin. They opened with good gains and rallied in afternoon trades. Price action was very significant in select sectors and stocks ended with large gains.

The CNX Mid-Cap index ended with gains of 42 points, or 0.91 per cent, to finish the day at 4625. BSE mid-cap index gained 0.49 per cent and the BSE small cap index ended with gains of 0.88 per cent.

Sugar stocks came back with a vengeance after sustained losses for the last many weeks. Mawana Sugar was the best performer and was locked in 20 per cent upper circuit. Balrampur Chini surged more than 9 per cent while Bajaj Hindustan gained over 6 per cent.

KCP Sugar, Dhampur, Dwarikesh, Simbhaoli, Rajshree and Ponni were the other major gainers. Uttam Sugar was locked in 10 per cent upper circuit.

Rama Newsprint was locked in 20 per cent upper circuit today as well.

Visa Steel, IFCI, Syndicate Bank, Vijaya Bank, TVS Motor and Prime Securities were among the other major mid-cap gainers.

Sterling Biotech, Sangam Industries, Bindal Agro, Bannari Amman Spinning, Apollo Hospital, Sandesh and Birla VXL were among the major mid-cap losers.

Mid-cap news flow

• Nagarjuna Constructions has received new orders worth Rs200 crore, including and order to construct a new cabinet secretariat building in Delhi.
• Dredging Corp has entered into a consortium agreement to participate in a tender for the remaining dredging work for the Sethusamudram Ship Channel project. The company has invested Rs5.5 crore in the entity implementing the project. The company is also planning to take dredgers on lease to augment capacity.
• Lupin has received US FDA approval for a hypertension drug in tablet form.
• Gujarat Ambuja Exports would expand its cotton spinning unit at an investment of Rs28 crore.
• Lincoln Pharma has entered into a JV for marketing its products in Russia.
• The board of Kew Industries would meet next month to consider capacity expansion and raising of additional resources.
• The board of Bhagyanagar India would meet tomorrow to consider a FCCB issue.
• Coromandel Fertilisers would set up a phosphoric acid unit in Tunisia along with GSFC and a Tunisian partner.
• PVR has opened 2 new multiplexes in Gujarat with a total of 6 screens.
• Honeywell Automation has completed the automation of 72 fuel outlets of Indian Oil.
  

*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 (-)