Markets opened the day on a weak note as expected, as heavy rains once again threatened to sink Mumbai. The decline in banking stocks and some of the frontline technology stocks led to the early weakness.

The trend reversed by early afternoon as ONGC made a come back and auto, cement and power stocks surged ahead. The indices recovered all their early losses and the Sensex closed the day at an all time closing high. However, the Sensex could not reach the 7700-mark, which it had briefly touched last week.

Ranbaxy, which had seen a sharp decline last week after the company reported disappointing first quarter results, was the star of the day among frontline stocks. After opening firm, the stock maintained it's uptrend and was trading with gains of over 10 per cent by early afternoon.

Most auto stocks saw very good buying interest throughout the day as July sales numbers have started coming out. Tata Motors was the most significant gainer, closing the day with gains of over 4 per cent. Maruti went up by 2 per cent while Ashok Leyland closed almost 5 per cent higher.

Power stocks also saw some good buying interest. NTPC shot up over 4 per cent while Tata Power closed with gains of over 2 per cent.

Banking stocks closed the day with losses after the spectacular run in recent days. SBI and HDFC Bank closed the day in red. ICICI Bank recovered its early losses and closed the day with gains of under a per cent.

Sensex closed at 7669, a gain of 34 points and the Nifty at 2318, a gain of 6 points. Nifty August futures closed the day at a discount of 8 points to the spot index, lower than the 16 point discount on Friday.

Ranbaxy, HLL and Tata Motors were among the major gainers among Nifty stocks while Zee Tele, HDFC Bank and MTNL were the major losers.

Hindustan Lever has reported a growth in quarterly profits after many quarters of declining bottom line. Profits were higher by 15 per cent on a revenue growth of 10 per cent for the quarter ended June 2005 as compared to the same quarter of previous year.

HLL benefited from stabilisation in detergent prices during the quarter and excellent growth in beverages and cosmetics. The company has declared an interim dividend of 25 per cent. The stock was one of the significant gainers among frontline stocks, closing well over 4 per cent higher.

ICICI Bank has reported a 23 per cent increase in first quarter profits to Rs530 crore. Net interest income was higher by 35 per cent as compared to the same quarter of previous year.

Retail assets of ICICI have shot up by 70 per cent during the quarter. The bank has been relentlessly pursuing a growth strategy driven by expansion of its retail business. Deposits were also higher by 70 per cent during the quarter.

There is considerable speculation that ICICI Bank is looking at a large acquisition in East Asia. The bank is reportedly interested in acquiring a large bank with strong presence in that region.

Meanwhile, ICICI has indicated that it will reduce its holding in Federal Bank to 5 per cent within the next couple of years. ICICI currently owns 20 per cent of the South-based Federal Bank.

Reliance Capital has bought out 100 per cent of life insurance AMP Sanmar. The deal was reportedly stuck at Rs400 crore and is subject to regulatory approvals. The stock closed 8 per cent higher.

Reliance Capital had received a life insurance license in 2001, which was suspended by IRDA after the company did not start operations. The company had recently applied to renew this license.

The acquisition of AMP Sanmar is seen as an important step for the Anil Ambani group in its quest to build a large financial services business. The group is believed to be keen on leveraging the more than 10-million subscriber base of Reliance Infocomm to expand its retail finance business.

SBI is reportedly conducting due diligence on Giro Bank of Kenya and Rupali Bank of Bangladesh for possible acquisitions. The bank has received RBI permission for the proposed acquisitions.

SBI is set to acquire four overseas banks with balance sheets size of between $50 and $200 million and the due diligence is expected to be completed by October. The bank is also opening branches in South Korea, China and Angola.

July sales volumes of passenger car major Maruti increased marginally by 3 per cent as compared to the same month of the previous year. While the volumes of the entry level model continued its sharp decline, the company was saved by increased volumes in the premium small car segment.

Maruti has also launched an upgraded version of its model Alto. Prices have been kept unchanged. The company is pushing the Alto as a more appealing entry level model to counter the declining sales numbers of the 800 model. Alto is the single largest selling passenger car in the country.

Hero Honda reported a close to 12-per cent increase in July sales volumes as compared to the previous year, helped by a 69 per cent rise in export volumes. Domestic sales were higher by over 10 per cent.

Bajaj Auto reported an 11 per cent rise in July sales numbers of motorcycles as compared to the previous year. Sales of scooters declined while three-wheeler sales were higher by 5 per cent. The company would expand its capacity by October of this year.

July shipments of cement major ACC was flat at 1.28 million tonnes as compared to the same month of the previous year.

SAIL has reduced the prices for hot rolled coils for the third time in three months. The company has reduced prices by 8 per cent. Global steel prices have come down considerably over the last few months as a result of increased supply and inventory build up.

SAIL and other major steel companies expect prices to firm up within a couple of months as the current stockpile is exhausted. The company's first quarter results were below market expectations.

Aluminium major, Nalco, has increased ingot prices by Rs1,000 per tonne.

BHEL has reportedly won an order for generation plants for a new power plant to be set up in the state of Andhra Pradesh. The order is reportedly worth over Rs2,100 crore. The stock lost well over a per cent.

Wipro is planning to establish a presence in the neighbouring countries of Sri Lanka and Bangladesh. The company is also planning an entry into Pakistan. The stock lost close to 2 per cent today. Recently, TCS had ventured into Pakistan by establishing training facilities in that country.

NTPC is reportedly close to signing a contract to source natural gas for two of its generation plants from Reliance Industries. The deal is expected to be concluded this month and the supply of gas would begin from 2008. NTPC closed with gains of almost 5 per cent.

Mid-Cap Action

Mid-caps recovered from the downtrend, which prevailed for most of last week as some of the more active stocks which are also on the derivative side of the market saw buying interest. The CNX Mid-Cap 100 index closed the day at 3429, a gain of 20 points.

Yes Bank, the youngest private sector bank in the country, reported a more than 10-fold rise in first quarter profits to over Rs11 crore. Net operating income also went up almost 15 times as compared to the same quarter of previous year. The stock gained over a per cent.

Dena Bank, one of the weakest PSU banks, has reported a loss for the first quarter ended June 2005 as against a profit for the same quarter of the previous year. Total income for the quarter also decreased marginally by 2 per cent. The stock closed over a per cent lower.

Essar Oil reported a loss of Rs35 crore for the quarter ended June 2005 as against a marginal profit during the same quarter of previous year. Total revenues went up more than four times for the quarter. The stock closed with gains of close to 5 per cent.

GIC Housing Finance, Voltas and Usha Martin were among the best performing stocks among mid-caps.

Trent, Hinduja TMT and Mahindra Ugine Steel 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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