Indices close higher but give up part of early gains

18 November 2005

Helped once again by firm global markets, the indices maintained their up trend today as well. US markets closed higher yesterday and most Asian markets opened with substantial gains today.

Indian indices also opened with a positive gap and gained a per cent each in early morning trades. From then on, the index movements were limited to a narrow band till early in the afternoon when they corrected on profit booking.

After giving up most of their gains by late afternoon, the indices recovered once again as fresh buying emerged in select heavyweights in the closing hour. Late buying was seen in stocks like ONGC, HLL and TCS.

Cement stocks Gujarat Ambuja and ACC were among the biggest gainers in index stocks today. Both stocks surged ahead on expectations of higher cement prices. Gujarat Ambuja closed more than 5 per cent higher while ACC added over 4 per cent. Grasim closed with gains of nearly 2 per cent.

Auto stocks had yet another day of substantial gains. Bajaj Auto added more than 3 per cent and crossed Rs2,000 for the first time ever. Maruti gained over 3 per cent and Tata Motors closed nearly 3 per cent higher.

Tech stocks were led by Wipro, which closed almost 3 per cent higher on the back of strong ADR performance yesterday. TCS added well over a per cent. Satyam and HCL Technologies lost over a per cent each.

Metal stocks, which were relatively subdued in this pull back rally, also gained ground in today's trade. Tata Steel and Hindalco were among the gainers. SAIL continued to bleed and closed a per cent lower.

Jet Airways, BHEL and Glaxo were the other major gainers among index stocks.

Pharma stocks, except Glaxo, corrected after the sharp rise in recent sessions. Dr. Reddy closed with losses of over a per cent and Ranbaxy lost nearly a per cent.

In the banking sector, ICICI Bank gave up more than a per cent after a smart rally early in the week. SBI closed marginally lower while HDFC Bank ended up with marginal gains.

Sensex closed at 8687, a gain of 37 points, and the Nifty at 2620, higher by 16 points. Nifty November futures closed at a discount of 1 point to the spot index.

Gujarat Ambuja Cement, ACC and Bajaj Auto were the major gainers among Nifty stocks while Tata Power, HCL Technologies and Dr. Reddy were the major losers.

US markets rallied yesterday and the frontline indices crossed multi-year highs. Sharp rise in technology stocks and lower crude prices helped the markets after indifferent trading in the previous 2 sessions. The S&P 500 index closed at a 5 year high and NASDAQ at a 4 year high.

The Dow gained close to half a per cent while the S&P 500 closed with gains of nearly a per cent. The sharp surge in internet stocks Google and Yahoo helped NASDAQ to close with gains of nearly 1.5 per cent.

Crude oil prices slumped once again, failing to sustain Wednesday's recovery. December crude futures lost well over 2 per cent and closed at $56.34 to a barrel. January futures are trading with marginal gains at $57.36 per barrel in early European trades today.

Indian ADR's had another good day yesterday, though some of the stocks corrected on profit booking. MTNL was the biggest gainer, adding close to 5 per cent. Wipro surged close to 3 per cent while HDFC Bank and Tata Motors closed more than 2 per cent higher each. Dr. Reddy and Satyam were among the losers.

According to media reports, Indian Oil may sell a part of its stake in ONGC to fund its overseas plans. The company is planning to enter product retailing in overseas markets and is also looking at acquiring an exploration company. Indian Oil's 9.6-per cent stake in ONGC is currently worth nearly Rs14,000 crore.

Meanwhile, ONGC has reportedly stated that it is not interested in selling its stake in Indian Oil. The company holds a 9-per cent stake in Indian Oil and nearly 5 per cent in GAIL. The government is expected to consider a proposal to sell off the cross-holdings by PSU oil companies shortly.

US-based International Trucks and Engines, which has entered into a JV with M&M to manufacture commercial vehicles, has plans to source auto components for its US operations from the new JV. According to reports, the total value of the components may touch $1 billion over the next seven years. The company would source components worth $100 million in the first year.

News agencies have reported that ONGC may bid for a stake in an offshore oil field in Nigeria. The field being operated by Total of France with a 24- per cent stake is said to have been valued at $1 billion. One of the existing stake holders has invited bids for the sale of its stake.

Ranbaxy has said that it is planning to launch a large number of drugs in the US markets over the next 2 years to arrest the decline in sales in that region. The drugs in the pipeline include cholesterol lowering statins, which are among the best selling products in the US. The company said it has filed for marketing rights of 47 products in the US.

Mid-Cap Action

Mid-cap action was once again no different from the frontline stocks. The mid-cap index moves in line with the large cap indices and recovered from the afternoon correction to close higher. Trading interest continued in some of the better known high volume stocks. The CNX Mid-Cap index gained 22 points and closed the day at 3779.

Patni Computer Systems has made the regulatory filings in the US ahead of its ADS issue. The company said it would issue up to 6.87 million ADS, each ADS representing 2 equity shares. Out of the proposed issue, existing domestic shareholders can sell up to 1.75 million ADS under the sponsored programme. The company would make a fresh issue of equity to the extent of 5.12 million ADS.

Thermax Limited gained after the company announced that it has won new orders worth over Rs175 crore for captive power plants. The stock had seen a rally yesterday also after the company announced very good quarterly results.

Allahabad Bank would hold a 34-per cent stake in its proposed general insurance venture. A strategic partner based in UK would hold 26 per cent. Indian Overseas Bank, Bank of Rajasthan and Karnataka Bank would be the other shareholders.

IndiaBulls surged close to 10 per cent in opening trades after the company said its board has approved a share buy back programme. As per the scheme, the company would buy back shares up to an upper price limit of Rs210 per share. The total value of the buy back would not exceed Rs38 crore.