Indices recover but market remains volatile

Though the indices managed to close with gains, the intra day movements remained volatile. After opening firm, the market slipped soon to touch yesterday's closing levels but recovered from there. The indices rallied from thereon only to give up part of the gains in an early afternoon bout of selling. The last half an hour saw some buying interest emerge and the indices closed near the highs of the day. Sensex closed at 6606, up 56 points and the Nifty at 2069, up 17 points.

Among index stocks, Zee Telefilms, SAIL and Shipping Corporation were the biggest percentage gainers while Oriental Bank of Commerce, Bharti Tele and Bajaj Auto were the top losers.

US markets extended Monday's gains on declining oil prices and major restructuring plans at pharma major Pfizer. Dow Industrial average added 37 points and NASDAQ added 8 points, close to half a percent.

For the second day, crude declined close to two percent to close at $56.05 to a barrel. Saudi oil company Aramco's plans to set up an export oriented 20 million tonnes per year refinery led to some profit booking in oil futures. US Federal Reserve chairman's statement that the current 'price frenzy' in crude oil will cool down as inventories build up, led to a further decline towards the later part of the day.

Indian ADR's listed on the New York exchange had a bad day with most of them closing with losses. Tata Motors was the major loser declining more than four percent. HDFC Bank, ICICI Bank and Satyam all closed with losses while Infosys and Wipro managed to close in the green.

Asian Development Bank released its outlook for Asian economies for the next three years. The bank expects Indian economy to post a growth of 6.9 percent for fiscal '05 - '06 on a revival in agricultural output. The growth rate for '06 - '07 is expected to decline to 6.1 percent as industry and service sectors slow down and revive to 7 percent for the year '07 - '08. ADB estimates inflation in India during next year to decline to under 5 percent and to around 3 percent for the following two years.