Markets had a moderately positive start in the morning as the positive mood from yesterday's strong close carried over. Weakness set in soon enough as worrying reports about the monsoon started coming in.

The indices did not see much further action till noon as they traded within a range with a negative bias. By around noon buying emerged and pushed up the indices into positive territory.

The last hour was volatile as the markets dropped suddenly and nearly touched the day's lows before staging a smart recovery. The indices closed at the day's high.

Sensex closed at 6860, up 27 points and the Nifty at 2112, up 9 points from yesterday's close. Nifty June futures discount to the spot narrowed marginally to 17 points from yesterday's 19 points.

Among Nifty stocks, Dabur, ICICI Bank and Bharti were the major percentage gainers while VSNL, Zee Tele and SCI were the major losers.

US indices closed with marginal gains yesterday as traders waited for release of more economic data due this week. The sharp rise in crude prices also acted as a dampener. Gains on Dow were less than one-tenth of a per cent while NASDAQ gained close to a quarter of a per cent.

Crude oil futures for July delivery surged close to 4 per cent to close above $55 to a barrel yesterday. Traders took fresh positions after reports that demand for diesel was rising across the globe which would put pressure on product supplies. OPEC is scheduled to meet tomorrow to consider increasing output.

Two of the Indian technology ADR's, Infosys and Satyam, were on fire yesterday. Infosys closed with gains of over 3 per cent while Satyam gained over 2 per cent. Wipro closed with marginal losses. Among others, telecom stocks MTNL and VSNL and bank stocks ICICI and HDFC all gained around 2 per cent each. Tata Motors continued its weak trend.

Mahindra and Mahindra has announced a joint venture agreement with International Trucks and Engines (ITEC) of US. The JV, to be called Mahindra International, will manufacture medium and large commercial vehicles and buses.

M&M will hold a 51 per cent stake in the JV, which will involve an investment of Rs400 crore from the two partners. ITEC is one of the largest manufacturers of trucks and buses in the US.

M&M will transfer its existing LCV business to the new company. ITEC is also expected to source auto components from India in a big way.

M&M's board approved the issue of bonus shares in the ratio of one share for every share held. The stock closed with gains of under one per cent.

Bharti Televentures has signed an agreement with global telecom equipment major Ericsson under which Bharti will outsource network and service management of some of the telecom circles to Ericsson. The deal is reportedly worth $250 million.

The deal is in line with Bharti's strategy of handing over network management and support to large equipment and service companies to focus more on marketing.

There also reports that the government will issue the notification to hike FDI limit in telecom to 74 per cent in a week's time. Bharti closed with gains of over 2 per cent.

Jet Airways has placed an order for a total of 20 new aircrafts with Boeing. The order includes 10 long-range wide body aircrafts of 777 series and 10 short-range aircrafts of the 737 series. It is not clear when the airline would take delivery of the new aircrafts. There are also reports that the airline would be placing an order with Airbus for 10 A330 long-range aircrafts.

The long-range aircrafts will be used in international routes and the 737 series will augment the airline's domestic fleet. Jet had started its services to London with leased Airbus aircraft. Launch of services to US has been postponed after an American company raised some objections. The stock gained with marginal gains.

Neyveli Lignite flared up during the day after reports that the finance ministry has sought the views of coal ministry about disinvestment of part of the government's stake. The stock closed with gains of over 3 per cent.

Tata Steel announced details of its proposed Iranian ventures. The company will partner an Iranian company for a 1.5 million tonne steel slab plant and 1.5 million tonne steel billet plant.

Tata Steel will also set up a 3-million tonne steel plant as a wholly-owned subsidiary. The output from this plant will feed the finishing mills of Natsteel, which was acquired by Tata Steel earlier. Total investment planned is around $1.2 billion. The stock closed with gains of a per cent.

Mid-Cap Action

Mid-cap stocks were back in action after yesterday's subdued performance. They out performed the large caps as many of them saw excellent gains. CNX Mid-Cap 200 index closed at 3083, a gain of 18 points.

Ind-Swift Laboratories gained over 7 per cent in early trades after the company announced excellent results for the fourth quarter. Profits for the quarter jumped more than 4 times as revenues nearly doubled.

Full year profits of Ind-Swift Lab more than doubled on a revenue growth of over 40 per cent. The company is currently expanding its capacities, which are expected to yield results from the next financial year. The stock closed with gains of close to 6 per cent.

DCM Shriram Consolidated has announced a large expansion plan involving an outlay of over Rs400 crore. The company is planning to double its sugar capacity and treble the power generation capacity. The expansion will be completed by the year 2007.

Rajasthan Spinning & Weaving will invest close to Rs400 crore to set up manufacturing facilities for home furnishing fabrics. The new facility would target the export markets and is expected to go on stream after 2 years.

NIIT Limited would provide Rs25 crore as a loan to set up a new private university. The company would also extend a grant of Rs5 crore towards the corpus of the university.

Aksh Optifibre, a manufacturer of optic fibre cables, was a significant gainer today after the company announced a new order from the government of Andhra Pradesh. The order to supply cables for a broadband project is reportedly worth over Rs90 crore.

Dewan Housing was another major gainer after the housing finance company announced plans to raise $50 million from an overseas issue. The stock closed with gains of over 10 per cent.

Vardhman Poly, Crest Animation and Shreyas Shipping were among the best performing stocks among mid-caps.

IVP Limited, Williamson Magor and IFB Agro were among the significant 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.

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