The markets were highly volatile today as the global cues were mixed. Despite a positive closing by US markets on Friday, Asian markets were subdued and some of them saw considerably weak openings. Oil prices bounced back today after remaining flat last week.

Selling by FII's continued in the cash segment last Thursday and they were heavy sellers on the derivatives segment on Friday too.

The indices opened the day on a relatively strong note and ran up gains of over half a per cent each within minutes of opening. However, the markets lost no time in to give up these gains and go into the negative.

After declining over half a per cent each, the indices bounced back and went back into positive territory by noon. News of FII selling in the derivatives segment on Friday led to more weakness and the indices dipped once again.

Short covering during the last hour of trade pulled the indices out of the red and they surged to retest the highs posted in morning trades. The closing minutes saw some minor selling and the indices gave up their gains once again and closed the day on a flat note.

Two-wheeler stocks had a very good day, led by Bajaj Auto. Buoyed by strong quarterly results, Bajaj Auto surged 6 per cent in today's trade. Hero Honda added a per cent. Maruti was another winner from the auto space adding close to 2 per cent. However, Tata Motors lost well over a per cent.

Among FMCG stocks, ITC added over a per cent while HLL added close to one-and-a-half per cent.

Reliance Industries closed the day with gains of close to a per cent. Group company IPCL was one of the best performers among index stocks, adding well over 3 per cent.

Steel stocks staged a bounce back after last week's sell off. SAIL added close to 2 per cent while Tata Steel added over 2 per cent.
BHEL was another big winner, adding over 4 per cent.

Pharma companies Dr Reddy and Ranbaxy remained weak today as well. Dr Reddy lost over 2 per cent while Ranbaxy declined close to a per cent.

However, Cipla attracted a lot of buying interest and closed almost 5 per cent higher. The company is reportedly readying to launch a generic vaccine to counter bird flu.

Private banking stocks were weak today and results announced by HDFC Bank could not turn around their fortunes. After opening strongly, ICICI Bank declined and closed with losses of well over a per cent. HDFC Bank lost 2 per cent after the announcement of results before recovering part of the losses. SBI bucked the trend in large banks and closed more than a per cent higher.

Sensex closed flat at 8202, a gain of 1 point, and the Nifty at 2485, higher by a point. Nifty October futures closed at a discount of 2 points to the spot index.

Dabur, Bajaj Auto and Cipla were the few gainers among Nifty stocks while VSNL, GAIL and Tata Tea were the major losers.

Crude oil futures rallied over 2 per cent in opening Asian trades today after reports of another storm in the Gulf of Mexico and bomb explosions in Iran. Crude futures for November delivery gained over $1.3 per barrel to touch $64. The commodity is trading above $64 per barrel in early European trades today.

Second quarter profits of HDFC Bank rose 31 per cent to Rs199.6 crore from Rs152 crore reported during the same quarter of previous year. Profits were higher by almost 9 per cent as compared to the Rs183 crore reported for the first quarter. Total revenues for the quarter is at Rs1,283 crore as against Rs867 crore during the previous year.

Media reports indicate that ONGC may tie up with global petroleum major Shell to set up a bitumen refinery at Mangalore. Bitumen demand in the country is growing at s steady rate with more and more road projects being taken up. The proposed project would source crude bitumen from MRPL and refine it to produce high grade bitumen.

A financial newspaper based in the UK has reported that global oil giant BP has sounded out Reliance Industries to acquire a stake in its natural gas fields in the KG basin. Top BP officials including its chairman were in India last week to launch joint ventures with PSU oil companies. Reliance has not responded to the reports.

Dabur announced that its board would meet next week to consider a bonus issue. The stock surged well over 10 per cent after the announcement before closing the day with gains of close to 9 per cent.

Mid-Cap Action

Mid-caps were also volatile during the day, but could not manage the last hour recovery like the frontline stocks. After two intra-day attempts at recovery, the mid-cap index closed the day half a per cent lower. The CNX Mid-Cap index lost 18 points and closed the day at 3661.

The Bombay High Court has set aside the sale of surplus textile mill land by National Textile Corporation. The PSU company had auctioned part of its land holding in Mumbai recently. Developers including an associate company of IndiaBulls had acquired parcels of land at very high prices.

The High Court has specified that only one-third of the mill land can be used for commercial development. Another one-third of the area should be set aside for low cost housing projects and the remaining one-third for open public spaces. NTC and buyers are expected to appeal to the Supreme Court against this verdict.

The verdict, if upheld by the Supreme Court, would have negative impact on companies like Bombay Dyeing which have large holdings of mill land in Mumbai. Bombay Dyeing had drawn up an ambitious development plan. The stock was one of the significant losers today.

Federal Bank has reported a profit of Rs54 crore for the second quarter as compared to Rs3.19 crore during the same quarter of previous year. The bank had a particularly weak second quarter during the previous year. Total income at Rs393 crore was 13 per cent higher than the Rs350 crore reported during the previous year. The stock added over a per cent.

Allahabad Bank reported a marginal 1 per cent rise in net profits for the quarter ended September. Profits for the quarter were at Rs168 crore as against Rs166 crore during the previous year. Total income rose almost 10 per cent to Rs1,064 crore from Rs971 crore.

Sugar company Dwarikesh Sugar has reported a 170 per cent rise in profits for the year ended September to Rs26.6 crore from Rs9.76 crore reported during the previous year. Total revenues increased 8 per cent to Rs155 crore from Rs143.5 crore. The stock added a per cent.

Newspaper reports indicate that Radico Khaitan is interested in acquiring some of the smaller liquor brands belonging to the UB group. After the merger of McDowell and Shaw Wallace, expected by next year, the UB group has indicated that it would bring down the number of brands under its fold by divesting some of them. Radico had recently acquired a few brands from Maharashtra-based Brihan Co-operative.

After the acquisition of from companies across the US and Europe over the last two years, Jubilant Organosys is reportedly scouting for more overseas acquisitions. The company is interested in contract research and manufacturing companies to expand its presence in this fast growing segment. The company would also commission four new manufacturing facilities within the country over the next few years.

The board of directors of Liberty Shoes has approved the proposal to set up a fully owned subsidiary in Dubai.

Pharma company Lupin said its board would meet shortly to consider a proposal to raise $100 million through an FCCB issue.

Coromandel Fertilisers said its board would meet this week to consider a stock split. The stock added over 3 per cent on the news.

Auto ancillary Omax Auto rallied over 6 per cent in afternoon trades after the company said its board would meet next week to consider an overseas acquisition or establishment of a subsidiary. The board would also look at raising resources from an overseas issue.

Stock broking company India Infoline said its board would meet this weekend to consider a proposal to raise additional resources through an equity or debt issue. The stock added more than 3 per cent.

Kojam Fininvest, Shriram City Union and Murudeswar Ceramics were among the significant mid-cap gainers on the NSE.

Taj GVK, Tata Metalics and Bajaj Auto Finance 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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