Indices started the day on a firm note as global cues were positive and the domestic sentiment was favourable after yesterday's recovery. Frontline indices were range bound till mid-afternoon as metal stocks continued to surge while select other stocks came under pressure.

The last hour of trade saw sharp surges in many frontline stocks which took the indices substantially higher within minutes. Much of the late surge was attributed to short covering in the last hour of trading for the January series of F&O contracts. The sharp discount in Nifty February futures supports this view.

Nifty set a new lifetime intra-day high of 4158 in the last hour while the Sensex failed to re-test its all-time high though the index went past 14300.

Sensex closed with gains of 172 points at 14283 and the Nifty gained 58 points to end at 4148. Nifty February futures closed at a discount of 19 points to the spot index.

Metal stocks continued their rally on hopes of firm prices this year. Results announced so far by the aluminium companies and the smaller steel companies were better than expectations. SAIL was once again the best performer, surging 7.24 per cent – taking total gains in just two sessions to over 14 per cent.

Tata Steel added another 6.09 per cent to yesterday's 3.5 per cent rally. Among aluminium stocks, good results helped Nalco to add 4.38 per cent while Hindalco ended 3.82 per cent higher.

Bharti Airtel recovered from a weak start and saw a sharp surge in late trades which took it more than 6 per cent higher. The stock finally ended with gains of 4.96 per cent while MTNL added 3.17 per cent.

BHEL gained 3.3 per cent in anticipation of good results.

Among cement stocks, Grasim bounced back strongly and ended 3.1 per cent higher.

Wipro was the best performer among tech stocks, with gains of 2.91 per cent.

HPCL bounced back 3.13 per cent despite the firm trend in crude oil prices.

Essar Oil surged another 10.74 per cent following the announcement of plans to de-list the company. Essar Steel, which is also proposed to be de-listed, gave up part of its early gains and ended 4.57 per cent higher.

IDFC continued it's up trend and surged another 8.42 per cent.

Dabur India was the worst performer among index stocks as it went ex-bonus today. The stock gave up 7.06 per cent after adjusting for the bonus.

Pharma stocks were weak, led by Cipla which lost 1.18 per cent. Ranbaxy shed 0.87 per cent while Glaxo closed 0.8 per cent lower.

Siemens corrected 1.1 per cent after many sessions of sustained rally.

OBC was the only loser among banking stocks, ending 1.1 per cent lower.

Reliance Energy, Zee Entertainment, IPCL and Hero Honda were the other major losers.

Global markets / crude oil
US markets sustained the up trend yesterday as technology stocks rallied on easing fears about a slow down in earnings growth. Firm trend in crude oil prices helped the oil stocks.

The Dow ended with gains of 0.7 per cent while the S&P 500 index gained 0.85 per cent. Technology stocks recovered smartly after the recent losses and the NASDAQ ended with gains of close to 1.45 per cent.

Asian markets were reasonably firm in early trades before most of them drifted down and ended lower. Shanghai slipped 4 per cent after three days of rallying while Indonesia continued to lose ground and ended 1.75 per cent lower. Singapore lost 1.3 per cent while Hong Kong ended almost 0.75 per cent lower. Malaysia, Japan and South Korea also ended lower.

Thailand was the only major gainer, adding over 0.5 per cent.

European markets were firm in opening trades but the indices have come off their highs. Major indices are trading with gains of between 0.1 and 0.5 per cent each in early afternoon trades.

Crude oil prices remained firm yesterday despite higher US fuel.

inventories as latest forecasts indicate that the weather may turn cooler in coming weeks, which would increase demand for heating oil and gas. Near month NYMEX futures gained around 0.5 per cent and settled at $55.37 per barrel yesterday. The commodity is trading with marginal losses in European trades today.

Large-cap news flow

• Reliance Industries is planning to set up a large petrochemicals complex in Russia if it can get a natural gas field, according to unconfirmed reports
  
• Tata Power has signed an agreement to set up a 1,000 MW coal-fired power plant in Chattisgarh at an estimated cost of Rs5,000 crore.
  
• Promoters of Essar Steel, who currently hold 87 per cent of the company's capital, are planning to buy out the minority shareholders and de-list the stock from the exchanges.
  
• Promoters of Essar Oil are also planning to buy out minority shareholders and de-list the stock. Promoters currently own 88 per cent of Essar Oil.

Mid-Cap Action
Mid-caps and small caps outperformed the large caps till late afternoon, but gave up part of their gains in late trades even as large caps were in a frenzied rally. The CNX Mid-Cap index ended 66 points, or 1.26 per cent, higher at 5316. BSE mid-cap index gained 1 per cent and the BSE small cap index ended with gains of 0.43 per cent.

Sathavahana Ispat, STC India, Paradyne Info, Shringar Cinema and Aarvee Denim all ended at 10 per cent upper circuits.

Windsor Machines, Hindustan Oil Exploration and Unity Infra were the major mid-cap gainers.

Alchemist Limited, Kale Consultants, Ramco Industries, Manugraph, EID Parry, Clutch Auto, Plethico Pharma and Pearl Global were among the major mid-cap losers.

Mid-cap news flow

• Escorts is planning to raise up to $100 million from a QIP issue. The funds would be used for financial restructuring and introducing new products
• Nitco Tiles would raise up to Rs250 crore from a FCCB/GDR/QIP issue. The company is also planning a manufacturing JV in China, according to unconfirmed reports.
• Novopan has received High Court approval for the merger of particle board and resin manufacturing business of group companies with itself
• Sakuma Exports would commission 2.4 MW wind power plants in a couple of months
• Pidilite Industries has acquired a 75 per cent stake in a domestic manufacturer of cementitious grouts for an undisclosed sum
• Era Constructions has completed its FCCB issue
• The board of RPG Cables is meeting next week to consider a prefnerential issue of convertible bonds.
• India Infoline said Bank of Baroda has tied up with the company to offer online stock trading to its customers
• Phoenix Lamps said private equity fund Actis has revised the open offer price from Rs152 to Rs190 per share
• Zandu Pharma would issue bonus shares in the ratio of one share for every 3 shares held
• UTV would invest Rs100 crore in joint ventures with Astro Multimedia and Rs75 crore each in Ignition Entertainment and India Games
• AllSec Technologies is planning to merge a subsidiary with the company
• Pyramid Saimira has tied up with a Karnataka-based real estate developer to build 15 multiplex complexes over a period of 3 years. The company would operate the multiplexes and associated facilities. The company has also tied up with another entity which would start online marriage bureaus in theatres operated by Pyramid.
• Mastek has started operations at its Chennai centre
• The open offer for 20 per cent of IL&FS Investsmart by E Trade opened today and would close on 13 February
• The board of Wire & Wireless, de-merged from Zee Entertainment, is meeting enxt week to consider fund raising options
• Coromandel Fertilisers has announced an open offer to acquire up to 20 per cent of Godavari Fertilisers at a price of Rs150 per share
• Hindustan Oil Exploration said tests conducted at one of its exploration blocks has confirmed satisfactory well deliverability
• Ind-Swift Laboratories would issue 28 lakh convertible warrants to promoters
• Asian Electronics would acquire a 49 per cent stake in an Irish company
• Sasken Communication would form a JV with Tata Autocomp to manufacture automotive electronics products for the global market
• Induj Enertech is planning a rights issue which would be considered at its board meeting next week
• Cholamandalam DBS would raise up to Rs200 crore from a rights issue
• The board of Nandan Exim would consider a rights issue at its meeting next week
• Morarjee Textiles would acquire all the brands and assets of an Italian garment manufacturer for an undisclosed sum
• The board of Jain Irrigation is meeting this week to consider options for fund raising
  

*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.