After yesterday's sharp decline, the indices were highly volatile today. After opening modestly lower, the Sensex slumped nearly 200 points to nearly 14000 while the Nifty dropped below 4000. They recovered soon after on select buying of index stocks at lower levels.

The pull back rally lifted the Sensex more than 150 points above yesterday's closing levels by early afternoon. But the index slumped to its early lows within an hour as selling resumed. The last hour saw some recovery, which helped the indices to limit their losses.

Sensex closed with losses of 100 points at 14091 and the Nifty gave up 13 points to end at 4045. Nifty February futures closed at a premium of 23 points to the spot index.

Hindalco continued its slump as concerns about the cost of its Novelis acquisition lingered. The stock ended 4.29 per cent lower, taking total losses over 2 sessions to nearly 18.5 per cent

VSNL slumped another 6.4 per cent even after reports that Tata Group would hike its stake through open market purchases. The stock had tumbled yesterday after the Tata Group let a deadline to acquire the 26-per cent government stake in the company expire
Reliance Communications gave up another 3.04 per cent on analyst opinion that Vodafone's entry would affect the company the most.

MTNL ended 2.05 per cent lower

Jet Airways saw a major slide and lost 6.01 per cent even after crude oil prices declined yesterday

HDFC Bank lost 2.5 per cent and HDFC gave up 2.01 per cent

Tata Steel came under pressure and shed 2.58 per cent

Among other major losers, L&T gave up 2.8 per cent and Maruti closed 2.31 per cent lower

ONGC saw some buying interest, despite the fall in oil prices, and closed 2.17 per cent higher. Gail India ended 2.6 per cent higher.

Bajaj Auto resumed its rally and closed 3.2 per cent higher

Zee Entertainment gained 3.72 per cent a day after it started trading as a focussed television entertainment broadcaster following the de-merger of its DTH business

Bharti Airtel gained 1.96 per cent as the company is expected to benefit from the business arrangement with Vodafone

Suzlon bounced back after yesterday's crash but gave up part of its gains and closed 1.74 per cent higher

Among tech stocks, HCL Tech added 1.5 per cent and Wipro closed 1.17 per cent higher

Nalco and Ranbaxy were the other major gainers

Global markets / crude oil
US markets declined yesterday as traders became sceptical about the outlook for the US economy and concerns about interest rate policy. Stocks like Vodafone and Novelis saw some action following acquisitions while select other stocks perked up on acquisition rumours. The decline in crude oil prices affected oil stocks.

The Dow closed more than 0.2 per cent lower and the S&P 500 lost nearly 0.35 per cent. NASDAQ ended with losses of close to 0.4 per cent

Asian markets were mixed today on positive economic data from some countries. Shanghai extended its gains and ended with gains of close to 0.9 per cent while Japan gained over 0.65 per cent. South Korea added 0.3 per cent and Malaysia ended 0.2 per cent higher

Hong Kong tumbled nearly 2.25 per cent while Singapore and Thailand lost around 0.7 per cent each. Malaysia closed 0.4 per cent lower.

European markets opened weak but have recovered subsequently. Major indices are trading with gains of between 0.2 and 0.3 per cent each in early afternoon trades.

Crude oil prices corrected yesterday after Saudi officials ruled out the need for further production cuts. A steep fall in natural gas prices also affected the sentiment. Near month NYMEX futures ended around $2 per barrel lower at $57.81 per barrel yesterday. The commodity is trading with modest gains in European trades today.

Large-cap news flow

• TCS inaugurated its Chinese JV in Beijing today. The company owns 65 per cent of the JV, which has reportedly won a major multi-million dollar project for setting up a foreign exchange trading system for an associate institution of Bank of China.
• Ranbaxy has launched the generic version of blockbuster drug Lipitor in Denmark. A leading German insurer has also selected the company's products for use by its customers.
  
• HCL Tech has entered into a strategic alliance with an actuarial consulting firm to strengthen its expertise in the insurance domain
  
• Ashok Leyland has reportedly submitted a bid to acquire a 29 per cent stake in Punjab Tractors. M&M had announced earlier that it had placed a bid while Tata Motors is said to be contemplating a bid.
  
• ICICI Bank's UK-based subsidiary would raise between $300 million and $500 million from a 5-year dollar denominated bond issue, according to unconfirmed reports.

Mid-Cap Action
Mid-caps and small caps were also highly volatile in today's trading. The CNX Mid-Cap index ended 7 points, or 0.13 per cent, lower at 5083. BSE mid-cap index lost 0.62 per cent and the BSE small cap index ended with losses of 0.55 per cent.

TVS Srichakra, which listed on the NSE today, ended 9.54 per cent lower

Orchid Chemicals, Patel Engineering, Strides Arcolab, Aftek Infosys, SSI, Pioneer Embroideries, Ramco Industries and Sarla Poly were the major losers among the major mid-cap losers.

Steel Strips Wheels ended at 10 per cent upper circuit for the third day. Tulip IT also ended the day at 10 per cent upper circuit.

Pritish Nandy, Technocraft, Weizman Industries, Quintegra, Arihant, Cinevistas, Vimta Labs and TCI Finance were the other major mid-cap gainers

Mid-cap news flow

• The board of IndiaBulls Financial would meet this week to consider the de-merger of its securities trading and advisory business to a separate entity and the merger of IndiaBulls Credit Services with the company
• IVRCL Infrastructure has won new orders worth a total of Rs516.09 crore. Of this, Rs411 crore worth of orders are for water supply and irrigation projects while the balance is for rural electrification
• Orchid Chemicals has kicked off its FCCB issue to raise $200 million. The 5-year bonds have an initial conversion price of Rs348.34 per share
• Reliance Capital has reportedly acquired a more than 6 per cent stake in television broadcast company GBN through market purchases.
• Greaves Cotton has acquired a German diesel engine manufacturer for an enterprise value of €4.24 million
• Alstom Projects has won orders worth Rs750 crore for execution of hydro electric power projects
• Taneja Aerospace has signed an agreement with BEML to explore opportunities in the defence market
• Spicejet has completed the preferential issue of equity shares at a price of Rs52.69 per share to a group of investors including Tata Investment Corp and has raised a total of Rs296.71 crore
• Subex Azure said a South African telecom company has selected its revenue assurance and fraud management software
• Essar Group has made the public announcement to buy out minority shareholders in Essar Shipping and take the company private
• Gujarat JHM Hotels would undertake the Rs200 crore expansion of its hotel and construction of a convention centre only after a detailed feasibility study
• Pyramid Saimira has opened another 5 multiplex theatres during the month of January with a total capacity of 8,039 seats
• Ankur Drugs would issue 26.25 lakh convertible warrants to promoters and other investors at a price of Rs175 per share
• Marsons would issue 32.5 lakh convertible warrants to promoters at a price of Rs5.2 per share
• Gulf Oil Corp has received mining projects worth a total of Rs300 crore
• Info Drive Software would raise Rs24 crore from a rights issue in the ratio of four shares for every share held. The company would also set up a subsidiary in the US
• Deccan Chronicle is planning to set up a SPV to launch the Bangalore edition of its newspaper
• Deccan Aviation has clarified that the company has not taken any decision on hiving off its helicopter charter business
• Archies has opened two more retail outlets in Haryana
• Shareholders and creditors of Anant Raj Industries have approved the merger of 5 privately held entities with the company
• Brakes Auto would raise Rs28 crore from a rights issue to finance its new unit
• Karur KCP has received orders worth Rs17.32 crore for packaging material
• Marico has redeemed preference shares worth a total of Rs30 crore
• Hanung Toys has clarified that though the company is contemplating an acquisition in China, no plans have been firmed up
• The revised open offer for Fulford India opened yesterday and would close on 03 March
• Dhandapani Finance would raise Rs22.26 crore from an issue of optionally convertible preference shares to a foreign investor
• Talbros Automotive would raise $15 million to finance expansion plans and setting up of new units. The company would issue 17 lakh convertible warrants to promoters and other investors
  

*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.