New Delhi: As expected, the indices opened on a cautiously positive note after yesterday's big fall. The gains were short-lived and the indices slipped deep into the red soon after. They maintained a steady downtrend for the rest of the day as every attempt at recovery was met with more selling pressure.

Continuing uncertainty across the globe is discouraging potential buyers from entering the markets in a big way. Latest FII investment figures for both the cash and derivatives markets were negative adding more pressure on the markets.

Cement, banking and auto stocks were the worst affected during the day. When ONGC slipped well over 3 per cent in afternoon trades, there was no stopping the fall in frontline indices.

Cement stocks faced heavy selling pressure and closed with substantial losses. Gujarat Ambuja was weak throughout the day and closed over 7 per cent lower. ACC was hit by below par quarterly numbers and the stock lost over 5 per cent. Ultratech Cements also came under heavy selling pressure and lost more than 4 per cent.

Banking sector was among the worst affected as most frontline banking stocks closed substantially lower.

ICICI Bank opened the day on a positive note, but came under selling pressure later in the day. The stock closed almost 4 per cent lower. HDFC Bank was another major loser, closing almost 3 per cent lower. SBI declined well over a per cent. Oriental Bank lost over 3 per cent.

Among the FMCG stocks, ITC lost well over 2 per cent and HLL decline over a per cent.

L&T and Bharti were the other major losers among the index stocks, losing over 4 per cent each.

Auto stocks also came under heavy selling pressure with Maruti being the biggest looser. Maruti lost over 4 per cent while Bajaj Auto lost close to 3 per cent. M&M lost 2 per cent while Tata Motors closed a per cent lower.

Steel stocks, which were among the worst hit in yesterday's trade, managed to trade higher till late in the afternoon. SAIL added well over 2 per cent and Tata Steel over a per cent in intra-day trades before giving up and closing marginally higher.

Sensex closed at 8202, a loss of 175 points, and the Nifty at 2484, lower by 53 points. Nifty October futures closed at a premium of 2 points to the spot index.

Nalco, Tata Steel and HDFC were the few gainers among Nifty stocks while Gujarat Ambuja Cements, ACC and Maruti were the major losers.

Falling crude prices and better corporate forecasts from analysts helped US indices to break the downtrend and close flat yesterday. However, worsening trade account scenario and higher import prices capped the gains. Apple Inc bounced back smartly after the previous day's fall on expectations of better sales for its music players in future.

The Dow closed flat while S&P 500 closed marginally higher. Helped by a recovery in technology stocks, NASDAQ closed half a per cent higher.

Indian ADR's generally had a weak day in the US markets yesterday. HDFC Bank was the biggest loser, closing more than 4 per cent lower. ICICI Bank lost half a per cent. MTNL lost over 2 per cent while Tata Motors closed almost 2 per cent lower. Dr. Reddy closed marginally lower and VSNL added more than half a per cent.

Among the technology ADR's, Infosys and Satyam added more than a third of a per cent each. Wipro lost over half a per cent.
Crude oil futures declined again yesterday after Wednesday's recovery as weekly US data showed a rise in crude oil supplies. Crude futures for November delivery closed the day at $63.08 per barrel, down $1.08, on the NYMEX yesterday. The commodity is trading lower by more than 50 cents in early European trades today.

ICICI Bank has reported better than expected results for the second quarter ended September. Total income for the quarter has increased 41 per cent to Rs4,325 crore from Rs3,066 crore reported last year. Net profit increased 31 per cent to Rs580 crore from Rs442 crore.

Net interest income for the quarter was higher by 39 per cent at Rs953 crore as against Rs685 crore during the same quarter of pervious year. Fee income increased 31 per cent to Rs704 crore from Rs537 crore. Net non-performing assets declined to less than a per cent of total assets during the quarter as against 2.6 per cent as at September 2004.

ICICI Bank's loan portfolio has increased at a very fast pace. Total assets were higher by 45 per cent as compared to the same quarter of previous year. Retail assets have grown at a much faster 73 per cent.

ICICI Bank's board has approved the plan to raise Rs7,000 crore, with a green shoe option of another 15 per cent, through a combination of domestic and ADR issues. The domestic component is expected to be around Rs6,000 crore considering the foreign shareholding in the bank at present.

HPCL has signed an agreement with global oil major BP to form a joint venture company. The new company would invest in refining and fuel marketing ventures. Reports suggest that both HPCL and BP would hold 26 per cent each in the proposed refinery at Bhatinda, Punjab. The rest of the equity would be held by financial institutions.

The acquisition of US-based Good Earth would reportedly cost Tata Tea $32 million. The American company had revenues of $16 million during the previous year with a market share of close to 4 per cent in herbal and speciality teas.

Cement major ACC has reported a more than 60 per cent decline in profits, adjusted for exceptional items, for the quarter ended September. Profits for the quarter were at Rs31 crore as against Rs80 crore reported during the previous year. Revenues for the quarter were higher by more than 11 per cent at Rs1,095 crore as against Rs984 crore during the previous year.

ACC had sold its refractory unit to ICICI Ventures during the quarter. Including the profit from this transaction, profits for the quarter were at Rs204 crore.

Bharti Tele said it would invest Rs250 crore in the current financial year to expand its network in the Madhya Pradesh and Chattisgarh telecom circles.

News agency reports suggest that Tata Motors may hike the prices of its passenger car models. Both Maruti and Hyundai had increased prices recently to offset higher input costs.

Mid-Cap Action

Mid-caps tried to hold ground in early trades after opening with gains. However, they tumbled in afternoon trades as selling gathered pace. The mid-cap index declined more than 2 per cent in late afternoon trades before recovering marginally. The CNX Mid-Cap index lost 72 points and closed the day at 3679, a loss of close to 2 per cent.

UTI Bank reported an over 90 per cent rise in total revenues for the quarter ended September to Rs866 crore from Rs445 crore reported during the same quarter of previous year. Net interest income rose more than 50 per cent to Rs687 crore. Profits were higher by over 135 per cent to Rs109 crore from Rs46 crore during the previous year.

The board of UTI Bank has approved plans to set up two subsidiaries. One of the subsidiaries would handle the sales of various banking products and services. The second subsidiary would be a venture capital management company on the lines of ICICI Ventures promoted by ICICI Bank.

India Cements has completed its GDR issue to raise $100 million, excluding the green shoe option. The company has not yet decided whether to retain the 15 per cent green shoe option. The GDR's would be listed on the Luxembourg stock exchange.

The board of directors of South Indian Bank has decided to raise up to Rs150 crore from a public issue to shore up the bank's capital base.

Export logistics company Gateway Distriparks reported a four-fold jump in second quarter profits to Rs20 crore from Rs5 crore during the previous year. Revenues for the quarter increased more than 100 per cent to Rs38 crore from Rs19 crore during the previous year. The company is planning to raise funds through an overseas issue.

Tata Sponge reported disappointing results for the quarter ended September. Net profit for the quarter almost halved as compared to the same quarter of previous year even as revenues rose more than 4 per cent. The stock dropped almost 10 per cent after the announcement.

Atul Products, Impal and SB&T International were among the significant mid-cap gainers on the NSE.

Bajaj Auto Finance, DS Kulkarni and Pearl Polymers were among the significant mid-cap losers on the NSE.

*Disclaimer: The author may have positions in some of 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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