Sensex closed with strong gains of 346 points at 14356 and the Nifty rallied 99 points to end at 4146. Nifty February futures closed at a premium of 22 points to the spot index.

Auto stocks had a very good day after yesterday's fall as the fuel price cut helped allay fears of declining demand on higher interest rates. M&M was the best performer among index stocks with gains of 5.4 per cent. Maruti ended 4.11 per cent higher while Tata Motors added 2.25 per cent.

Hero Honda bounced back with gains of 4.77 per cent.

Metals also staged a strong rally today. SAIL surged 4.84 per cent while Nalco ended 4.73 per cent higher. Hindalco gained 3.52 per cent and Tata Steel closed 0.84 per cent higher.

Technology stocks surged ahead in the afternoon, led by Infosys which ended 4.3 per cent higher. Satyam rallied 4.46 per cent and Wipro gained 4.12 per cent. Wipro gained 4.12 per cent and TCS ended with gains of 2.5 per cent.

Cipla was firm throughout the session and ended with gains of 5.11 per cent. Glaxo added 3.45 per cent.

L&T staged a smart recovery and ended 5.03 per cent higher

Among banks, ICICI Bank added 3.85 per cent and SBI closed 1.84 per cent higher. HDFC Bank gained 2.41 per cent and OBC closed 2.13 per cent higher.

Bharti once again led telecom stocks with gains of 4.06 per cent while Reliance Communications recovered 3.37 per cent. MTNL added 3.79 per cent and VSNL gained 2.69 per cent.

Ranbaxy saw a big sell-off and was the worst performer among index stocks with losses of 5.32 per cent

Suzlon continued to decline and lost another 2.75 per cent on reports that the company may go in for equity dilution to finance its recently announced European acquisition.

The fuel price cut pulled down HPCL by 1.34 per cent

Reliance Energy lost 0.76 per cent and Tata Power gave up 0.47 per cent

Among cement stocks, ACC lost 0.17 per cent and Grasim gave up 0.07 per cent

Bajaj Auto slipped by a marginal 0.05 per cent after yesterday's gains

Gail was the other loser among index stocks with losses of 0.7 per cent

Global markets / crude oil
US indices continued to rally yesterday after the Fed chairman said inflation pressures are beginning to diminish. This statement helped ease concerns about further rate hikes. He also said that the housing market may be showing some signs of a recovery.

The Dow closed nearly 0.7 per cent higher and the S&P 500 gained more than 0.75 per cent for the second day. Technology stocks were the best performers and NASDAQ ended with gains of 1.15 per cent

Asian markets surged ahead for the second day on strong cues from the US market and strong GDP growth in Japan. Shanghai extended its gains into the third day and ended with gains of over 3 per cent. Singapore and Indonesia gained close to 2.25 per cent each. Hong Kong added over 1.6 per cent and Malaysia ended more than a per cent higher.

Japan added more than 0.8 per cent higher while South Korea ended 0.5 per cent higher. Thailand was the major loser and ended more than 0.55 per cent lower.

European markets opened firm but have slipped into the red in afternoon trades. Major indices are trading with losses of between 0.05 and 0.15 per cent each in early afternoon trades.

Crude oil prices declined yesterday after the previous day's recovery. Near month NYMEX futures ended $1.06 per barrel lower at $58 per barrel yesterday. The commodity is trading with gains of close to 0.5 per cent in European trades today.

Large-cap news flow

• SBI has completed its $400 million hybrid tier-I perpetual note issue and another $300 million floating rate note issue
• NTPC and BEML have signed an agreement to set up a JV to maximise coal production through deployment of mining equipment. BEML would be engaged as the mine developer operator for the coal blocks owned by NTPC
• Tata Steel said its UK-based subsidiary has hiked its stake in Corus Group to 21.9 per cent through market purchases
• Jindal Steel & Power has acquired a 40 per cent stake in Globeleq Singapore, which is a co-promoter of the 4,000 MW Sasan ultra mega power project
• The board of Reliance Industries would meet later this month to consider various options to raise $2 billion to finance various capital expenditure programmes

Mid-Cap Action

Mid-caps and small caps also surged ahead after yesterday's consolidation. The CNX Mid-Cap index ended 150 points, or 2.93 per cent, higher at 5245. BSE mid-cap index rallied 2.64 per cent and the BSE small cap index ended with gains of 3.15 per cent.

Redington, an IT hardware distributor and supply chain manager, got listed today. Issued at Rs113 per share, the stock opened at Rs130 on the NSE and saw a high of Rs174.4. The stock finally ended at Rs163.7

House of Pearl Fashions, another new listing today, fared far worse. Issued at Rs550 per share, the stock opened at Rs499.9 on the NSE and saw a low of Rs444.2. The stock finally settled at Rs469.95

Cinemax, which had a subdued listing yesterday, ended at 20 per cent upper circuit.

Television broadcasting stocks had a spectacular day. GBN, a recent listing, ended at 20 per cent upper circuit. TV Today soared 18.05 per cent on reports that R-ADAG has taken a 10 per cent stake in the company

The beaten down stocks among mid-caps bounced back strongly. Sugar stocks were among the best performers, led by Bajaj Hindustan which gained 12.64 per cent

AI Champdany closed at 20 per cent upper circuit while South East Asia Marine ended at the 10 per cent upper circuit.

Bombay Rayon Fashions, Pochiraju Industries, Network 18 and ITI were the other major mid-cap gainers

Genesys International, Ansal Housing, Birla VXL, GMR Industries, Key Corporate Services, Munjal Auto and Heritage Foods were the major losers among the major mid-cap losers.

Mid-cap news flow

• Indiabulls has announced the details of the de-merger of its securities broking and advisory business and the merger of Indiabulls Credit Services. Shareholders would receive one share of Indiabulls Securities for every share held. The swap ratio for the Indiabulls Credit Services merger has been set at 3 shares of the company for every 10 shares. The company has also formed a committee to negotiate the acquisition of minority shareholding in Indiabulls Housing Finance
• Jain Irrigation has acquired a US-based manufacturer of micro-irrigation systems for $21.5 million in cash.
• Promoters of Adani Enterprises have announced an open offer for 8 per cent of the company's capital at a price of Rs233 per share
• PVR would start operations at 3 more multiplex screens in Mumbai
• The open offer to the shareholders of Yokogawa India by its Japanese parent opened today and would close on 20 February
• Narmada Chematur has received High Court approval for its merger with GNFC
• ABG Shipyard has delivered a new anchor handling tug supply vessel to an Egyptian customer
• Micro Inks said it has merged the recently acquired US company with its US-based subsidiary
• The board of Krebs Biochemicals would meet next week to consider the issue of 10.5 lakh equity shares to Ranbaxy
• Pyramid Saimira is planning to raise $100 million from a FCCB issue or from external commercial borrowings. The company is also planning to raise FII investment limit to 33 per cent
• Bajaj Hindusthan Sugar has called off its plans to raise $61.8 million from a preferential issue of equity shares and an FCCB issue
• Fulford India has raised Rs40.25 crore from a preferential issue of equity shares to promoters at a price of Rs575 per share
• Zandu Pharma has announced a bonus issue in the ratio of one share for every share held
• Spanco Tele is planning to raise up to Rs150 crore to finance expansion plans
• Godavari Power and Ispat has received environmental clearance for its mining project and is awaiting forest clearance.
  
  

*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.