Indices lose early gains and close marginally lower

21 December 2005

Gains in stocks like ONGC and Reliance Industries in early trades helped the indices to go close to the intra-day highs posted yesterday. The Sensex traded around the 9400 mark till early afternoon.

Asian markets were mixed today even as Japan and Korea closed with strong gains. The Japanese markets continued their rally and closed at a 5-year high. The Japanese index touched 16000 after a gap of many years in early trades today.

The markets dipped sharply in afternoon trades and the Sensex lost more than 100 points from the day's highs. Heavy losses on banking counters pulled down the indices. The last hour saw a recovery and the indices closed with marginal losses.

Hero Honda was the biggest gainer among index stocks after Honda announced that the company would launch many new models with an advanced engine technology besides setting up a new assembly plant. The stock closed more than 4 per cent higher.

Ranbaxy recovered from the losses of last two sessions and closed 2 per cent higher. Cipla was another winner from the pharma sector, closing more than half-a-per cent higher.

ONGC and Reliance Industries both closed with gains of more than half-a-per cent each.

Banking stocks were the worst hit in today's market, led by SBI. The stock lost close to 3 per cent followed by OBC and PNB which lost more than one-and-a-half per cent each. HDFC Bank also lost more than a per cent.

Cement stocks also had a bad day as ACC lost more than 3 per cent. Grasim gave up more than a per cent while Gujarat Ambuja also closed lower.

Wipro, ITC, VSNL and Hindalco were the other losers among index stocks.

Sensex closed at 9339, a loss of 7 points, and the Nifty at 2823, lower by 3 points. Nifty December futures closed at a premium of 1 point to the spot index.

Hero Honda, Ranbaxy and HDFC were the biggest gainers among Nifty stocks while ACC, SBI and OBC were the major losers.

US indices closed lower for the fourth straight day yesterday as some of the large stocks came under pressure. General Motors was the biggest drag on the indices as the company is expected to lose its position as the world's biggest auto company to Toyota. Data released yesterday showed low wholesale price inflation.

The Dow closed nearly one-third of a per cent lower while the S&P 500 and the NASDAQ closed with marginal losses.

Crude oil closed almost flat for the second day yesterday as traders await weekly US inventory data. January futures on the NYMEX closed at $58.09 per barrel, higher by 4 cents from the previous day's close. The commodity is trading with gains of close to half-a-per cent in early European trades today.

ONGC and CNPC of China have jointly acquired a 37 per cent stake in a Syrian oil field for $574 million. The stake was acquired from Petro Canada and both companies would equally share the oil entitlement. The deal is subject to the approval of the Syrian government.

This is the first time an Indian oil company is teaming up with a Chinese competitor for acquiring oil assets. ONGC had competed against CNPC in a couple of earlier deals and had lost.

After Tata Motors, it is the turn of M&M to venture into Pakistan. The company has reportedly signed an agreement with a Pakistani business group for export of completely knocked-down tractor kits. M&M's partner would assemble the kits and sell them locally. The date of commercial launch and estimated volumes were not made available.

NTPC has filed a suit in the High Court of Mumbai against Reliance Industries for alleged failure to honour a purchase agreement for natural gas. Reliance Industries had agreed to supply gas to a couple of proposed power projects of NTPC. Reliance apparently wants an upward revision in prices and extend commencement of deliveries.

In the petition, NTPC wants Reliance to stick to the original terms of the agreement and delivery schedule. The power utility also wants to restrain Reliance from signing up new customers for natural gas.

News agency reports indicate that NTPC is likely to be given seven coal blocks by the government. The blocks would be awarded to a joint venture between NTPC and Coal India.

Honda Motor of Japan has announced that Hero Honda would set up its SBI is reportedly raising one-year funds to meet the redemption of India millennium deposits, which are due for repayment next week. The bank had raised more than Rs33,000 crore five years back from the IMD issue. The bank is expecting a pay out of more than Rs25,000 crore, with the balance being renewed.

L&T is planning to form a joint venture with an overseas company for marine installations like rigs. The company is reportedly searching for a suitable partner to address the demand for such installations in India and the Middle East.

Mid-Cap Action

Movements in mid-caps were in line with the trend in frontline stocks today as well. The CNX Mid-Cap index lost 1 point and closed the day at 3990.

The board of directors of VisualSoft has approved the merger scheme of Applabs and E-solutions with itself. The company would issue 17 shares for every six Applabs shares and one share for every six E-solutions shares held by the existing shareholders of these companies. The stock was one of the major gainers in the mid-cap segment.

The board of Mercator Lines has approved a plan to raise up to $75 million from an overseas issue of equity or convertible bonds. The board has also approved a bonus issue in the ratio of 3 shares for every 2 shares held. The FII investment limit in the company would be raised to 70 per cent.

Glenmark Pharma has informed the exchanges that it has launched its FCCB issue to raise $30 million. The company said the bonds would be convertible after a period of five years at a premium of 35 per cent to the weighted average price. The bonds would be listed on the Singapore exchange.