Markets opened firm on the back of improved global market sentiments ahead of the US Fed meeting. The rise in crude prices yesterday was considered as more of a technical move and markets are not attaching any significance to it.

The changes effected by the government to the fringe benefit tax and clarification from many companies about lower than expected impact of the tax helped improve sentiments.

Even domestic market players are keenly following the US Federal Reserve meeting as a significant change in interest rates could have an effect on FII inflows into the country.

Sensex closed at 6217, up 22 points and the Nifty at 1921, up 4 points. Nifty May futures discount to the spot index widened to 18 points from yesterday's 10 points.

Among Nifty stocks, Tata Chemicals, ACC and BHEL were the major percentage gainers while TCS, Wipro and BPCL were the major losers.

After Friday's crash of over 4 per cent, crude futures bounced back yesterday. June futures closed with gains of over 2 per cent at $50.92 to a barrel. The surge was attributed to short covering and crude has opened weak in early trades today.

US markets had a volatile day yesterday as investors are waiting for the decision on short term interest rates at the US Fed meeting starting today. After opening firm, the indices declined as crude prices surged. However, they reclaimed most of the lost ground towards closing. Dow gained half a per cent while NASDAQ gains were marginally lower.

Indian ADR's had yet another mixed day as ICICI Bank and VSNL staged a strong bounce back. Both ADR's gained over 4 per cent each on the NYSE. Infosys, HDFC Bank and MTNL ended with losses while Tata Motors, Satyam and Wipro managed to close with gains.

Tata Motors is reportedly launching a light commercial vehicle to take on three-wheeler goods carriers. Currently, companies like Mahindra & Mahindra, Bajaj Tempo and Piaggio are marketing three-wheelers of larger capacities as light commercial vehicles. Tata Motors is said to be lauching a four-wheeled product at a price of over Rs2 lakh.

Oriental Bank of Commerce announced the issue price for its second public offering which concluded last week at Rs250 per share. The issue had a price band of Rs235 to Rs260. The stock hit a high of Rs287 in early trades and closed at Rs284. The stock of PNB, another PSU bank which came out with an issue, is trading below its issue price.

Cement companies announced good growth in April shipment volumes. While ACC reported a growth of over 13 per cent, Grasim's volumes were up by over 10 per cent. ACC closed with gains of close to 2 per cent.

Natural gas company Gail India reported disappointing numbers for the quarter ended March 2005 as increased subsidy burden took its toll on profitability. Profits for the quarter declined close to 20 per cent even as revenues rose close to 10 per cent. After opening flat, the stock gained over a per cent by the end of the day.

Mid-cap action

Many mid-cap stocks bounced back strongly as buying emerged after many days of selling pressure.

ERP software major Oracle will take over the PeopleSoft development centre of Hexaware Technologies in Bangalore. The centre was set up by Hexaware under an agreement with PeopleSoft, later acquired by Oracle, on a build, operate and transfer basis.

Plastic container and pipe manufacturer Sintex Industries was a major gainer after the company announced encouraging results for the year ended March 2005. The company has achieved a profit growth of around 60 per cent as revenues rose over 25 per cent. The stock hit a new 52 week high today.

Jindal Vijayanagar Steel gained over a per cent in early trades after the company announced that its board will meet to consider the merger of three companies into itself.

Laminated packaging tube manufacturer Essel Propack, an associate company of Zee Tele, gained over 2 per cent in early trades. The company has announced plans to invest $15 million on a new manufacturing plant in the US.

Mid-cap pharma company Indswift Limited gained over 7 per cent after the company announced a more than 100 per cent rise in profits for the year ended March. Profit growth for the fourth quarter was a more modest 20 per cent. Group company Indswift Lab also gained 3 per cent in after noon trades.

Sugar stocks bounced back after the government reduced the duty on molasses to Rs750 per tonne from Rs1,000 per tonne proposed in the budget. Dhampur Sugar and Bajaj Hindustan made very good gains.

Among mid-cap stocks Coromandel Fertilizers, Thiru Arooran Sugars and 3M India were the significant percentage gainers.

Adlabs Films, Hindustan Dorr Oliver and Pearl Global 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