Markets opened firm in the morning as investors the world over were relieved at the US Fed's decision on interest rate being on expected lines (The Greenspan factor on Indian stocks). US markets had reacted positively to the decision yesterday and the decline in crude oil prices added to the positive sentiment.

After trading in a range till early afternoon, the indices surged as buying emerged in many frontline stocks. There were reports of some short positions getting covered. However, volumes remained on the lower side.

Sensex closed at 6290, up 73 points and the Nifty at 1943, up 22 points. Nifty May futures discount to the spot index narrowed to 10 points from yesterday's 18 points.

Among Nifty stocks, Punjab National Bank, Ranbaxy and Tata Power were the major percentage gainers while Sun Pharma, Tata Motors and ACC were the major losers.

US markets were extremely volatile yesterday as investors awaited the decision on short term interest rates and the Fed's outlook on various economic indicators. The markets declined in late afternoon trades after the Fed failed to maintain its earlier outlook on long term inflation. The indices recovered equally fast after a clarification was issued mentioning that the outlook remained unchanged. The indices closed flat at the end of an eventful day.

Crude futures continue their volatile ways. Yesterday the benchmark NYMEX crude for June delivery lost around 3 per cent to close below $50 to a barrel.

In line with the volatile mood of the general markets, Indian ADR's had yet another mixed day. ICICI Bank, VSNL and Satyam were the significant losers while Dr. Reddy's, Tata Motors and MTNL closed with gains.

Punjab National Bank was one of the biggest gainers in frontline stocks with gains of close to 5 per cent. The stock has been on a down trend ever since its public issue concluded last month. Even after today's gains, the stock is still trading below its issue price.

Pharma major Ranbaxy reversed the losing trend ever since it declared its results. The stock bounced back smartly and closed with gains of over 4 per cent.

International telecom services provider VSNL is reportedly tying up with British company Cable & Wireless to provide a host of telecom solutions in the Indian market. The services will be offered under the brand Tata Indicom in the country. The stock gained close to a per cent.

After the successful launch of its SUV model Scorpio in the Middle East and South Africa, Mahindra & Mahindra has launched the vehicle in Malaysia. The stock closed with gains of close to 3 per cent.

Tech stocks led by Infosys gained today after the weak trend that prevailed since their results were announced. Infosys gained close to 2 per cent while TCS gained over a per cent. Wipro and Satyam also managed to close with gains.

Mid-cap action

Most of the market activity was concentrated on mid-cap stocks as many of them saw substantial gains. Many stocks which had turned weak last month bounced back strongly.

Some of the stocks which are newly listed and were trading below the IPO price bounced back providing some relief to the investors. Shringar Cinema gained over 8 per cent while JP Hydro gained 2 per cent.

Union Bank of India announced flat profits for the year ended March 2005 even as revenues were higher as compared to the previous year. Profits were hit by falling income from treasury operations. Credit disbursals and income from core banking operations have shown decent growth. The stock gained over 2 per cent.

Flextronics Software, earlier known as Hughes Software, gained over 13 per cent in early trades after parent company Flextronics announced its intention to delist the stock from the domestic stock exchanges. Flextronics is offering Rs575 per share of the software company and the stock closed above Rs600. Singapore based Flextronics is one of the world's largest contract electronics manufacturer.

Logistics company Gati gained over 10 per cent in early trades after news reports that international logistics company TNT would buy the company. The stock closed firm even after TNT India denied the reports.

Mid-cap software company Hexaware Technologies was one of the major losers after the company announced that its PeopleSoft development centre will be taken over by Oracle. Investors are worried that this would reduce the company's revenues in future despite assurances to the contrary from the company.

Mid-cap auto ancillary stocks saw all round buying today, probably by institutions, after many of them have declared good results. Ucal Fuel, Lumax Industries, SKF India, Sundaram Fasteners, Automobile Axles and Wheels India all saw substantial gains.

Royal Airways, the company launching the low cost airline Spicejet, gained after the announcement of an FCCB issue to raise $90 million. The company has received its first aircraft and expects to start operations this month itself. The stock closed with gains of over 3 per cent.

Orient Paper, a diversified company with interests in cement, paper and household electric fans belonging to C K Birla group, lost ground today after the company reported losses for the quarter ended March 2005. Many analysts had been recommending the stock as a turnaround story after cement and paper prices started going up. The stock closed over 6 per cent lower.

Another company, which has been analysts' favorite, to disappoint with its results was Rain Calcining. The calcined coke and power producer reported lower profits for the quarter ended March 2005. The stock closed 4 per cent lower.

Among mid-cap stocks Rane Madras, Shanti Gear, and Samtel were the significant percentage gainers.

Ahmednagar Forgings, Salora International and Kesoram Industries 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

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List of general reports on finance