Sensex touches 8200 and Nifty closes at 2500 as markets rally for the 10th day

Markets started the day on a weak note by dipping sharply on opening before recovering and trending higher. The indices gave up again within half an hour and were trading with losses till about noon.

Buying in banking, auto and select technology and oil marketing stocks helped the frontline indices to gain strength in afternoon trades, which took them to new lifetime highs.

Sensex touched the 8200 mark briefly in the last half hour of trade before retreating and closing marginally below the mark. Nifty held on to its gains and managed to close exactly at 2500 for the first time ever.

Among the frontline stocks supporting the indices were Infosys and SBI, both adding well over a per cent each. ITC, Bharti, Bajaj Auto, HDFC, HDFC Bank and Maruti were the other gainers among index stocks.

While Bharti closed at a lifetime high with gains of close to 3 per cent, Maruti and Bajaj Auto closed at 52-week highs.

Sensex closed at 8194, a gain of 56 points, and the Nifty at 2500, a gain of 16 points. Nifty September futures closed at a discount of 14 points to the spot index.

IPCL, Reliance Energy and Dabur were the biggest gainers on the Nifty while M&M, ACC and Hero Honda were the major losers.

The US indices had a flat day yesterday as the markets consolidated after two weeks of decent gains. A bunch of multi-billion dollar merger deals and declining oil prices kept the sentiment marginally in the positive. The decline in crude prices exerted some pressure on large cap oil stocks.

While the Dow closed with marginal gains, the S&P 500 closed marginally lower. NASDAQ gained one third of a per cent on acquisitions by Oracle and ebay.

Indian ADR's had a good day on the US exchanges yesterday with technology stocks Wipro and Satyam leading the pack. While Wipro added over 3 per cent, Satyam closed more than a per cent higher. Infosys, however, closed with marginal losses. Among the telecom stocks, MTNL gained close to 2 per cent VSNL closed with losses.

ADR's of Tata Motors and Dr. Reddy's closed with gains of half a per cent each. ICICI Bank and HDFC Bank ended the day with marginal gains.

Crude futures for October delivery declined below $63 to a barrel yesterday before recovering and closing at $63.34. The commodity is trading marginally higher in early European trades today.

The consortium led by Indian Oil has lost the bid to acquire a 51 per cent stake in Turkish refining company Tupras. Global oil major Shell has acquired the company along with a Turkish partner for $4.14 billion. Indian Oil's bid was lower by $20 million and the company did not raise its bid. The stock added well over a per cent.

The state owned oil company of Bangladesh has offered a coal gasification project to GAIL. The proposed project is at a major coalmine in Bangladesh with estimated deposits of over 1 billion tonnes. Gail is currently setting up a coal gasification project in Rajasthan and is also in discussions with some Chinese companies for similar projects in that country.

GAIL has also offered to assist the Bangladesh oil company in commercial extraction of natural gas. Some of the reserves in southeast Bangladesh are not big enough to make gas pipelines viable. GAIL would help Bangladesh to set up CNG facilities or a gas based power station at the wellhead. The stock added a per cent.

Ranbaxy has entered the Italian pharma market through a wholly owned subsidiary based in Milan. With this move, Ranbaxy has established its presence in all the major European markets. The Italian pharma market is worth over $16 billion per annum. The stock closed marginally lower.

Jet Airways has signed the formal agreement to buy 10 Boeing 777-300 extended range aircrafts, with an option to buy 10 more. The long-range wide-bodied aircrafts would help the airline to expand its international operations. Deliveries are expected to begin by March 2007. The stock gained close to 2 per cent.

Refining major MRPL, a subsidiary of ONGC, gained over 3 per cent on reports of a massive expansion plan. According to media reports, the company has indicated to the oil ministry that it would add 40 million tonnes per annum of new refining capacity in the near future.

Reliance Energy has been selected by the government of Maharashtra to set up two power plants in the state. The plants with a combined capacity of 210 MW would provide captive power to two industrial clusters. The stock closed well over 3 per cent higher.

The board of Hindalco would meet next week to consider various options to raise additional resources, including a rights issue. The stock closed with marginal losses.

Mid-Cap Action

Mid-caps also continued their rally, as most of the active counters remained firm. Performance of the mid-cap index was in line with the frontline indices. The CNX Mid-Cap index closed the day at 3833, a gain of 25 points.

The day belonged to smaller bank stocks belonging to the SBI group. Participating in a function organised by State Bank of Travancore, the SBI chairman had indicated that a stock split would be considered for SBT this year. That mild remark was enough to take the SBT stock up by a massive 48 per cent today.

State Bank of Bikaner & Jaipur gained 44 per cent while State Bank of Mysore went up by 20 per cent. Volumes are usually very low on these three stocks as they are not very liquid. They are listed only on the BSE.

Deccan Chronicle launched its FCCB issue yesterday to raise $54 million. The bonds are convertible after a period of five years and would be listed on the Singapore Stock Exchange. The conversion price has been set at Rs523, which is at a 60 per cent premium to yesterday's closing price on the domestic bourses. The stock closed with gains of over 3 per cent.

Mid-cap software company Four Soft has allotted close to 4 million shares to an offshore fund managed by Kotak Bank and two overseas companies. The shares have been allotted at Rs63.3 per share, a significant discount to the current market price.