Indices opened firm, helped by the positive trend across other Asian markets, before surging ahead to new lifetime highs by mid-morning. They sustained their up trend till mid-afternoon when a sudden drop erased almost all the gains within minutes. The indices recovered in the last hour of trade, but closed way below the day's highs.

Sensex recorded a new lifetime intra-day high of 14326 today while the Nifty set a new record of 4140. Both indices closed at new lifetime highs.

Sensex closed with gains of 86 points at 14218 and the Nifty gained 33 points to end at 4109. Nifty January futures closed at a premium of 11 points to the spot index.

ONGC was firm throughout the session on speculation about the announcement of a major gas discovery. The stock finally ended 2.21 per cent higher.

Among other oil & gas stocks, Gail India gained 2.49 per cent. HPCL added 2.21 per cent and BPCL closed 1.67 per cent higher.

Reliance Industries closed 1.3 per cent higher ahead of its results.

Dabur saw a major surge and ended with massive gains of 10.47 per cent

VSNL continued its rally and added 3.48 per cent

SAIL also sustained the up trend and ended 1.91 per cent higher

Jet Airways also showed no signs of fatigue and closed with gains of 2.19 per cent

L&T was the other major gainer, closing 2.27 per cent higher.

Tata Steel was the worst performer among index stocks, closing 1.72 per cent lower

ICICI Bank dropped sharply in afternoon trades and ended 1.58 per cent lower while OBC lost 1.55 per cent

Reliance Communications gave up 1.4 per cent and MTNL shed 0.65 per cent

Reliance Energy ended 1.37 per cent lower and Tata Power lost 0.62 per cent

Among engineering stocks, ABB gave up 1.18 per cent and Siemens lost 0.73 per cent

Tata Motors was the other major loser, closing 1.07 per cent lower

Global markets / crude oil
US markets ended modestly lower yesterday as producer price inflation data released yesterday led to concerns that a rate cut by the Fed may not happen anytime soon. Weak results from Intel led to sustained fears that corporate margins would come under pressure.

The Dow index lost nearly 0.05 per cent while the S&P 500 index gave up close to 0.1 per cent. Technology stocks remained under pressure for the second day and the NASDAQ closed nearly 0.75 per cent lower.

Asian markets rallied after two days of mixed trends. Indonesia was the best performer, adding close to 1.1 per cent, followed by Hong Kong, which ended 1.05 per cent higher. Singapore added 0.8 per cent and Malaysia gained 0.7 per cent while Japan ended over 0.6 per cent higher. Thailand closed with gains of 0.5 per cent and South Korea gained a modest 0.25 per cent.

Shanghai remained weak, but recovered from a sharp fall in early trades to close around 0.75 per cent lower.

European markets were weak in opening trades, before recovering later. Major indices are trading with gains of between 0.3 and 0.7 per cent each in early afternoon trades

Crude oil prices recovered after the sustained decline over the last couple of weeks. Near month NYMEX futures ended more than $1 per barrel higher at $52.24 yesterday. The commodity has lost modestly and is trading close to $52 per barrel in European trades today.

Large-cap news flow

• The recent gas discovery by ONGC in the KG basin is commercially viable, according to media reports. However, ONGC would make a formal announcement only after a detailed study. There is speculation that the reserves may exceed expectations of around 22 trillion cubic feet.
  
  
• ONGC has clarified that no formal agreement has been reached with Cairn India for building a pipeline from Rajasthan, though discussions have been held.
  
  
• HPCL is in discussions with French oil company Total to sell a strategic stake in its Vizag refinery expansion project, which is expected to cost around Rs18,000 crore. There are unconfirmed reports that HPCL may sell a 49 per cent stake in its proposed refinery in Punjab to LN Mittal and another 15 per cent to Oil India.
  
  
• Essar Oil would expand its refining capacity to 16 million tonnes per annum by 2010 at an investment of Rs3,000 crore, according to media reports. The refinery's current installed capacity is 10.5 million tonnes. The company is also planning a new 16-million tonne refinery to take total refining capacity to 32 million tonnes by 2011.
  
  
• Reliance Industries is in discussions to start fuel retailing in Sri Lanka, according to media reports quoting Sri Lankan government sources.
  
  
• Pantaloon Retail, though its subsidiary, has formed an equal JV with US-based Staples to start retailing of office supplies in India at an investment of $20 million. The company had acquired a domestic online office products supplier recently.
  
  
• Ranbaxy has acquired a 14.9 per cent strategic stake in Krebs Biochemicals.

Mid-Cap Action

Mid-caps and small caps continued their rally in early trades before coming under pressure and losing most of their gains. The CNX Mid-Cap index ended one point, or 0.01 per cent, lower at 5320. BSE mid-cap index lost 0.25 per cent and the BSE small cap index ended with gains of 0.27 per cent.

NIIT Technologies ended the day at 20 per cent upper circuit, following announcement of quarterly results, which were much better than expectations.

Biocon also rallied 10.51 per cent following good quarterly results.

DCB, Helios & Matheson, Gemini Communications, Wire & Wireless, KEI Industries, BAG Films and Jayant Agro were the other major mid-cap gainers.

Lumax Auto Tech, which listed this week, lost another 7.18 per cent.

Eimco Elecon, Tata Metallics, Goldstone Technologies, Alps Industries, Bluestar, Plethico Pharma, Universal Cables, IFB Agro and Weizman Industries were among the major mid-cap losers.

Mid-cap news flow

• Subex Azure would acquire a Canadian company which provides telecom operations support software for an enterprise value of $164.5 million in an all-cash deal. The target company has revenues of $45 million annually.
  
  
• Areva T&D has received new orders from major customers. Reliance Petroleum has placed an order worth Rs42.5 crore while Nalco has placed an order worth Rs193.4 crore. An overseas order from Libya is worth Rs16.17 crore.
  
  
• Elecon Engineering would invest Rs400 crore in a new facility in Gujarat to manufacture windmill gear boxes
  
  
• OCL India would de-merge its steel and real estate divisions into separate companies.
  
  
• Surana Telecom ha leased out its 96,000 square feet IT facility in Hyderabad to major technology companies.
  
  
• KLG Systel would issue 10.7 lakh convertible warrants to promoters at a price of Rs261 per share.
  
  
• Liberty Shoe is planning to raise up to Rs125 crore.
  
  
• Shree Cement said it would start commercial production at its new unit by March.
  
  
• Spanco Tele has signed a contract to set up a call centre for railway enquiry.
  
  
• Sona Koyo has allotted 43.97 lakh equity shares and 70.4 lakh convertible warrants to promoters at a price of Rs67.1 per share.
  
  
• Goldiam International has signed an agreement to retail silver jewellery through retail stores in eight more locations.
  
  
• Dollex Industries would invest Rs20 crore to set up another ethanol unit.
  
  
• Biocon has licensed its cancer drug for marketing in Pakistan.
  
  
• 3i Infotech is planning to raise additional resources by issuing up to 2 crore equity shares.
  
  
• IOL Broadband would issue 19.5 lakh equity shares to institutional investors and 5 lakh shares to Bennett, Coleman & Co.
  

*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.