Indices decline amid volatility

Indices witnessed large volatility from the morning itself as traders remained unsure of market direction. After Infosys failed to give a pleasant surprise yesterday, most traders are now waiting for the results from other IT majors like TCS and Satyam as well as other frontline companies.

The bounce back in crude oil yesterday did not help the sentiment and the flat closing by US markets did not give any cues either. After some sharp movements in opening trades, the indices declined close to half a per cent within an hour.

Recovery in Infosys and PSU bank stocks like SBI and PNB helped the indices to recover from the losses and trade flat till early afternoon. Lack of buying support later in the afternoon saw the indices declining to the lows of the day.

Sensex closed at 7248, a loss of 56 points, and the Nifty at 2204, a loss of 17 points. Nifty July futures discount to the spot index widened to 11 points from yesterday's 2 points.

Dabur, Zee Tele and VSNL were among the major gainers among Nifty stocks while GAIL, Ranbaxy and HDFC Bank were the major losers.

The surge in crude prices held the US markets under check yesterday. The Dow closed the day with marginal losses while S&P 500 closed with gains of close to one quarter of a per cent. NASDAQ closed with gains of close to half a per cent.

Crude bounced back over 3 per cent to close at $60.62 to a barrel yesterday. Crude futures for August delivery surged on worries of new storms in the Gulf of Mexico affecting oil production.

Indian technology ADR's had the worst day in recent months as Infosys results disappointed a section of traders. Infosys lost close to 7 per cent while Satyam lost close to 6 per cent. Wipro was better off, closing the day with losses of over 3 per cent. Dr. Reddy's and HDFC Bank were the other major losers, closing over 2 per cent lower. ICICI Bank also closed with losses.

The strong gains in VSNL yesterday in the domestic markets reflected in the ADR as well, gaining close to 15 per cent. MTNL and Tata Motors were the other major gainers closing over 3 per cent higher.

Cement major ACC reported a 70 per cent increase in first quarter profits on a revenue growth of close to 20 per cent. The stock surged over 2 per cent after the results were announced, but gave up part of the gains after traders realised that exceptional gains boosted profits.

The company has decided to change its financial year from April-March to Jan-Dec, to align its reporting with that of Holcim. The European cement major is a large shareholder in ACC. The company has also decided to sell its refractory division to ICICI Ventures for over Rs250 core.