Markets opened the day after the long 3-day weekend on a strong note. Strong economic data for the month of July released last Friday and a positive closing by the US markets were the positive factors along with a marginal decline in crude prices.

Within half an hour of opening, the indices declined sharply and went into the red as selling pressure emerged at higher levels. A section of operators are still worried about the continuation of FII inflows, which showed a negative daily figure last week after a long time.

The indices recovered equally fast and spent the rest of the day moving within a band, with alternate bouts of buying and selling.

Sensex closed almost flat at 7768 and the Nifty at 2370, a gain of 9 points. Nifty August futures closed the day at a discount of 5 points to the spot index.

BHEL, HCL Technologies and SAIL were among the major gainers among Nifty stocks while Satyam Computers, HDFC Bank and Hero Honda were the major losers.

US markets closed firm yesterday as crude oil declined from its record highs of last week. The Dow and S&P 500 indices closed with gains of over one fourth of a per cent each. NASDAQ closed half a per cent higher as technology stocks found good buying support.

Crude futures for September delivery declined close to a per cent after crossing $67 to a barrel on Friday. The commodity closed at $66.27 on the NYMEX yesterday. Crude was trading lower around $66 in early European trades today.

Indian ADR's had a mixed day yesterday with no large flare-ups or declines. Tata Motors, VSNL, ICICI Bank and HDFC Bank were among the gainers, all closing with gains of less than a per cent each. MTNL and Dr. Reddy's lost close to a per cent each.

Among the technology ADR's, Wipro and Satyam closed in the positive while Infosys closed with marginal losses.

The joint venture between ONGC and Mittal Steel group is believed to be the front-runner to acquire Petro Kazakhstan. The JV has reportedly bid $3.6 billon for the whole of the company, which produces over 10 per cent of Kazakhstan's oil output.

China's largest oil company CNPC is the other prominent bidder but its bid is believed to be lower than the ONGC-Mittal combine.

ONGC has also announced 4 new oil finds, 3 in the KG basin and 1 on the western coast. The quantities of the reserves are being assessed. The company has also partly restored production at Bombay High after the recent fire on one of its platforms.

After the Bhatinda Refinery, which will be a joint venture with a global oil company, HPCL is planning to set up a new export oriented refinery at Vizag. The new refinery is expected to have a capacity of 15 million tonnes per annum and will also be set up in partnership with an overseas company. Aramco of Saudi Arabia, BP, Petronas of Malaysia and Total are among the companies interested in the new ventures of HPCL.

VSNL has turned a price warrior in the bandwidth market after the acquisition of Tyco Global Network (TGN) and commissioning of other undersea cable links. The company has reduced bandwidth tariffs between India and the US by 45 per cent. The stock closed with losses of a per cent.

VSNL completed 5 years as a listed company on the New York Stock Exchange yesterday. From being the monopoly provider of international telecom services in India, the company has emerged as a global telecom entity after its recent overseas acquisitions.

PSU capital goods company BHEL continued its up trend despite the government cancelling the disinvestment programme. The company had won some overseas orders recently. The stock closed with gains of 6 per cent.

The government has formally cancelled disinvestment plans for 13 PSU companies including HPCL, Nalco, Shipping Corporation and Rashtriya Chemicals and Fertilizers.

Tobacco and hospitality major ITC expects its agro division to grow by 20 per cent in the current year. The company is diversifying its business at a fast pace to reduce dependence on tobacco products. The stock closed with marginal gains.

Technology stocks except Wipro had a bad day today. Satyam was the biggest loser, closing 2 per cent lower while TCS and Infosys also closed lower. Wipro closed with marginal gains.

Expectations of a recovery in steel prices led to good buying in steel stocks. SAIL closed the day with gains of close to 4 per cent, while Tata Steel gained well over a per cent. Among the smaller steel stocks, Essar Steel, Ispat and JSW Steel closed with good gains.

Tata Steel management has indicated that the company is looking at another acquisition in the Far East after its recent acquisition of Singapore based Natsteel.

Auto stocks declined on reports of another round of fuel price hikes. Tata Motors, Maruti, M&M and Hero Honda closed lower.

Mid-Cap Action

Mid-caps outperformed the frontline stocks today as well. Heavy buying was seen in many of the liquid counters, especially technology stocks. The CNX Mid-Cap index closed the day at a new lifetime high of 3623, a gain of 16 points.

Banking software products company I-Flex has won an order from a Vietnamese bank for its flagship product Flexcube. Global ERP major Oracle had acquired a large stake in I-Flex and would be coming out with an open offer for another 20 per cent, which would give it a majority stake.

I-Flex management is confident that being a subsidiary of Oracle would help the company in acquiring customers for its products. Oracle's ERP solutions have a large customer base among the largest banks and financial services companies. The stock closed with marginal losse.

Scandent Solutions has won an order from Singapore Airlines for implementing an Enterprise Learning System. The new system will improve the training programmes of Singapore Airlines. The stock closed with substantial gains.

Heavy buying was seen in some of the mid-cap software stocks. Visual Soft led the pack with gains of over 14 per cent. Cranes Software, Rolta India, Geodesic Info and 3i Infotech were among the other significant gainers.

IT education company NIIT Limited gained on reports of the company tying up with the government of Chattisgarh to start computer education programmes in 1200 schools in the state.

PSU stocks HMT, which had seen considerable appreciation in the previous week, declined and closed with losses of over 4 per cent.

Even as HMT corrected, another PSU stock Hindustan Organic Chemicals saw frenzied buying and closed with gains of 27 per cent.

Mid-cap pharma company IndSwift Laboratories has completed its GDR issue and has raised over $10 million. The GDR's were issued at $4.25 or a 15 per cent discount to the current domestic price and will be listed on the Luxembourg stock exchange. The stock closed with losses of over 2 per cent.

Apollo Hospitals, the country's largest hospital group, is planning to acquire pathology and diagnostic laboratories in various parts of the country. Diagnostic labs are receiving considerable business from overseas through outsourcing.

There are market rumours that Apollo is also looking at acquiring multi-speciality hospitals around the country and has already firmed up Rs700 crore with a consortium of partners.

Ambuja Eastern Cements rallied after European Cement major Holcim informed the stock exchanges that it might consider merging the company with ACC. The public holding in Ambuja Eastern is lower than the required 10 per cent and the exchanges had asked Holcim, which holds a majority stake in the company, about its plans to increase the public holding.

Holcim in its reply has indicated that the company may be merged with ACC within the next 1 year.

PSL Limited will issue zero coupon convertible foreign currency bonds to raise $40 million. The bonds are convertible after 5 years at a 37 per cent premium to Friday's closing price on the BSE.

Supreme Industries closed at the 20 per cent upper circuit after the company informed that it is planning to develop its real estate properties in Mumbai and Kolkata.

IFB Industries, Sandesh and Novopan were among the best performing stocks among mid-caps.

IDFC, HFCL and Titanor Components 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.

Market: Indices

National Markets
Gain (+) / Loss (-)