Late surge helps indices to close higher

08 December 2005

It was yet another day of indecisive movements for the markets. Despite the decline in crude prices, US markets closed lower yesterday. Select Asian markets like Japan and Hong Kong saw heavy losses today while others were generally subdued.

The indices opened marginally in the positive and traded in a narrow range around yesterday's closing levels till early afternoon. Selling pressure in afternoon trades saw the indices slipping and the Sensex slipped well below the 8850 mark.

The recovery in the last hour was swift and the indices went back to their day's highs in no time. They closed the day near the day's highs. Gains in ONGC and TCS helped the Nifty to outperform the Sensex by a wide margin.

Dabur was once again the best performer in frontline stocks, adding more than 5 per cent. The stock has gained more than 9 per cent in just 2 trading sessions.

Pharma stocks had a good day led by Cipla which closed more than 3 per cent higher. Sun Pharma added more than 2 per cent while Glaxo recovered from its weak trend of recent days and also closed more than 2 per cent higher. Ranbaxy, however, gave up a per cent.

Strong subscriber additions for the November attracted buying in telecom stocks. Bharti added more than 1.5 per cent. MTNL maintained its uptrend from yesterday, gaining another 1.5 per cent.

M&M was the best performer among auto stocks, adding well over 2 per cent. Both Tata Motors and Maruti added close to a per cent each.

Among the heavyweights, ONGC continued its rally for the third session and added close to 1.5 per cent. TCS closed with gains of more than a per cent.

Banking stocks had a weak day as HDFC Bank lost nearly a per cent. ICICI Bank gave up close to half a per cent. HDFC was the biggest loser among financial stocks, closing more than 1.5 per cent lower.

Sensex closed at 8906, a gain of 10 points, and the Nifty at 2707, higher by 14 points. Nifty December futures closed at a discount of 12 points to the spot index.

Dabur, Cipla and M&M were the major gainers among Nifty stocks while HDFC, L&T and Ranbaxy were the major losers.

Data released over the last few days showing continuing US economic growth has once again gains raised concerns about interest rates. The markets feel that the absence of any sign of a slowdown would force the US Fed to keep raising the interest rates. Most financial services property development stocks fell yesterday. Oil stocks were also weak as the rally in crude is showing signs of weakness at higher levels.

The Dow and NASDAQ closed two-fifths of a per cent lower. The S&P 500 lost half a per cent.

Crude oil gave up more than a per cent yesterday on better than expected inventory levels in the US. Most analysts were expecting a decline in stocks in the weekly inventory data released yesterday. January crude futures on the NYMEX lost 73 cents and closed at $59.21 yesterday. The commodity is trading flat in early European trades today.

GSM mobile subscriber base of Bharti has crossed the 15 million mark in November. The company has added 6.8 lakh new subscribers during the month as the mobile industry maintained its strong growth momentum. However, subscriber additions by Bharti for the month were lower than its nearest competitor BSNL.

Tata Motors has announced a price increase of around 2 per cent for medium and heavy commercial vehicles. The company said the hike was to absorb higher costs. Maruti is also expected to announce a price hike for its passenger car models.

NTPC is threatening to sue Reliance Industries if the latter fails to start natural gas supplies in 2007 as per the earlier agreement.

According to reports, NTPC has been allowed by the ministry of power to take legal action. The 2 companies had signed an agreement for supplying 13 million cubic metres per day of natural gas from 2007, which Reliance is trying to re-negotiate and postpone the commencement of delivery.

Mahindra & Mahindra is getting aggressive on acquisitions. According to reports, the company management has said that it is close to finalising 3 acquisitions within the country. The company is also reportedly eying 2 overseas acquisitions.

BHEL has announced an interim dividend of 40 per cent or Rs4 per equity share.

The management of TCS has clarified that there are no proposals for a bonus issue before its board at present. The company was responding to queries from the exchanges after media reports about a planned issue. The stock had seen some appreciation on market talk about a bonus issue or stock split.

Mid-Cap Action

Mid-cap stocks underperformed the frontline stocks today as well as even frontline stocks were searching for direction for most of the session. The CNX Mid-Cap index added 13 points, or one-third of a per cent, and closed the day at 3906.

KEC International has announced that it has won 2 overseas contracts from Afghanistan and Ethiopia for construction of power transmission lines. The order from Afghanistan is worth Rs204 crore and the Ethiopian project is worth Rs135 crore. Both orders have been awarded by Power Grid Corporation of India, which is the implementing these projects.

Titan Industries rose to yet another lifetime high today, closing more than 10 per cent higher. The stock has gained nearly 100 per cent from its recent lows in October on strong growth outlook. The latest driver for the stock is said to be surging gold prices.

Asian Electronics has announced an agreement with US based Westinghouse Lighting to increase outsourcing of electrical products for global markets. Under the deal with Asian Electronics, Westinghouse would be sourcing more products from India. Both companies are confident about the potential over the next few years.