Markets opened firm in early trades following the lead from US markets which staged a strong rebound on Friday and declining oil prices. It was shortlived though, as the indices lost all their gains soon after and traded flat till noon.

Markets slipped into the red in early afternoon trades on reports of disappointing auto sales numbers and reduction in prices of some metals.

Late afternoon saw a strong rally as traders covered their short positions. The indices rose smartly and closed near their day's highs.

Sensex closed at 6195, up 41 points and the Nifty at 1917, up 14 points. Nifty May futures discount to the spot index narrowed to 10 points from Friday's 20 points.

Among Nifty stocks, Zee Tele, BPCL and HPCL were the major percentage gainers while HLL, ITC and Colgate were the major losers.

Crude futures for June delivery crashed over 4 per cent to settle below $50 to a barrel on Friday. NYMEX crude futures closed at $49.72, its lowest closing since February. Crude has declined further to around $49 in early trades today.

Falling crude prices helped the US markets to recover and close the week on a positive note. On Friday, a late afternoon rally lifted the US indices after trading lower in early trades. Dow gained over a per cent while gains at NASDAQ were marginally lower than a per cent.

Indian ADR's had a mixed day even as Infosys bucked its losing trend by posting gains of over 3 per cent. On the NYSE, Wipro managed a positive closing while Satyam lost ground. Among other stocks, HDFC Bank and MTNL gained while Tata Motors and ICICI Bank declined.

Oil marketing company stocks had a field day as crude prices have declined substantially. There are also reports that the petroleum minister is meeting the left parties on fuel price hike. BPCL and HPCL were the major gainers.

Auto major Maruti reported disappointing sales numbers for the month of April. Volumes declined over 4 per cent as compared to the same month of last year. A major drop in volumes of the base model Maruti 800 sent the stock deep into the red. After declining close to 5 per cent, the stock recovered part of its losses by closing.

Two wheeler companies Hero Honda and Bajaj Auto gained after they reported excellent sales volumes for April. Bajaj Auto stood out with volume growth of over 50 per cent over the same month of previous year. In absolute numbers, Bajaj is still a distant second to Hero Honda which posted a 20 per cent rise in volumes for April.

ICICI Bank reported better than expected results for the quarter ended March 2005. The country's largest private sector bank reported a 35 per cent increase in profits as revenues rose 20 per cent.

The bank expects credit growth to maintain the pace set last year. Though the bank will need additional capital to address this growth, it does not intend to come out with another public issue. The bank is reportedly considering dilution of its holdings in various subsidiaries to fund its core banking business.

After opening almost 3 per cent higher in early trades, ICICI Bank lost most of its gains and closed flat.

Copper and aluminium major Hindalco gained over 4 per cent in early trades after it declared its quarterly numbers on Saturday. For the year ended March, the company has reported a 58 per cent growth in profits on a revenue growth of over 50 per cent over the previous year. The numbers for the current year are after the merger of Indal with the company and hence are not comparable.

News of a cut in aluminium prices by Nalco took part of the shine out of Hindalco and the stock lost much of its early gains. Nalco lost close to 2 per cent.

Zee Tele was the biggest gainer among index stocks today. There are reports that the company has concluded a licensing agreement with Hollywood studio Buena Vista for its English movie channel.

Mid-cap action

Engineering and cement company Jaiprakash Associates lost over 3 per cent in morning trades after the company reported a 50 per cent drop in profits for the fourth quarter of last year. Revenues have also declined marginally by 3 per cent. For the full year, profits have dipped marginally by a per cent.

After the strong run up recently, KEC International lost over 5 per cent in morning trades after the company announced its results. Profits for the fourth quarter, adjusted for exceptional items, have declined over 60 per cent. Operating margins have declined substantially during the quarter.

One of the country's largest motor pump manufacturers Kirloskar Brothers reported a massive 230 per cent growth in profits for the quarter ended March. Revenues have increased over 50 per cent. The stock was locked in the 10 per cent upper circuit in early trades.

Among mid-cap stocks Gufic Biosciences, Ajanta Pharma and Shasun Chemicals, all of them drug companies, were the significant percentage gainers.

Aarti Drugs, GTN Textiles and Mukand were among the major mid-cap losers.

*Disclaimer: The author does not have any position in 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.

Other articles by Rex Mathew

List of general reports on markets

List of general reports on finance