Indices decline after touching new intra-day lifetime highs

23 December 2005

Gains in technology stocks like TCS and Infosys helped the indices to record new highs in morning trades. ICICI Bank also supported the main indices after the RBI said FII's can buy more of the stock.

The Sensex recorded a new lifetime intra-day high of 9443 while the Nifty saw a high of 2857 in morning trades.

However, from then on it was a steady decline for the rest of the day. The Sensex declined almost 200 points from the highs of the day as some of the heavyweights came under selling pressure.There was no attempt at recovery and the indices closed at their day's lows.

Asian markets were mixed today as Japan, Malaysia and Indonesia closed lower while Korea ended with gains. European markets are firm with UK trading at a 4-year high.

HDFC and HDFC Bank were the worst hit as the former slumped close to 7 per cent today. HDFC Bank gave up nearly 3 per cent.
ICICI Bank gave up all of its early gains by afternoon before recovering and closing more than a per cent higher. OBC was the other winner from the banking space, adding more than a per cent
Steel stocks came under heavy selling pressure led by Tata Steel. The stock closed nearly 3.5 per cent lower. SAIL lost well over 2 per cent.

Jet Airways continued its decline and gave up another 3 per cent today.

Power utility stocks Reliance Energy and Tata Power both lost around 3 per cent each.

In the pharma space, Glaxo and Dr Reddy closed with losses of over 2.5 per cent each. Ranbaxy gave up early gains and closed marginally lower while Sun Pharma closed higher.

Tata Chemicals added a per cent after the company finalised an overseas acquisitions. Wirpo was another stock which closed higher on news of overseas acquisitions.

Sensex closed at 9257, a loss of 115 points, and the Nifty at 2805, lower by 30 points. Nifty December futures closed at a discount of 18 points to the spot index.

OBC, Dabur and ICICI Bank were the biggest gainers among Nifty stocks while HDFC, Zee Tele and Tata Steel were the major losers.

US indices maintained their uptrend from the previous day on lower inflation and good corporate results yesterday. US consumer prices rose a marginal 0.1 per cent during November as per data released yesterday, once again raising expectations about an early end to interest rate hikes. The end of a strike by transport workers in New York also helped maintain the positive sentiment.

The Dow closed half-a-per cent higher while the S&P 500 ended nearly half-a-per cent higher. Gains on the NASDAQ were higher at close to two-thirds of a per cent.

Crude oil declined yesterday on reports that winter demand would slow down in the coming months. January futures on the NYMEX closed at $58.28 per barrel yesterday, lower by 28 cents from the previous day's close. The commodity is trading with marginal losses in early European trades today.

Tata Chemicals has signed the final agreement to acquire a majority stake in UK based soda ash manufacturer Brunner Mond. The acquisition would cost Tata Chemicals more than Rs500 crore.

Brunner Mond is the largest soda ash manufacturer in the UK and the acquisition would make Tata Chemicals one of the top 5 producers globally.

Within days of announcing a European acquisition, Wipro has announced two more acquisitions. The company said it would acquire a US-based company with a development centre in India and another company based in Chennai. The acquisitions would cost Wipro $28 million and both would be settled fully in cash.

Both acquisitions are in the financial solutions space. The US-based company reportedly has revenues of close to $18 million and profits of over $4 million. The Chennai-based company is a joint venture between the US company and MasterCard International. Wipro has signed an agreement to acquire the stake held by MasterCard.

News agency reports quoting government officials of Andhra Pradesh indicate that Reliance Industries is planning to build a natural gas distribution network in Andhra Pradesh. The company would set up the grid to supply gas to customers in major towns in the state.

The company has also reportedly sought land for construction of a special economic zone in which a petrochemical complex is being planned. The project is expected to be completed by 2008 when Reliance starts commercial production of natural gas from the KG basin, on the Andhra coast.

Ranbaxy has settled a patent dispute with Cephalon of the US for a sleep disorder drug. Under the agreement, Ranbaxy would get a non-exclusive license to launch a generic version of the drug after 6 years. Other terms of the settlement are not known.

The government is reportedly seeking a revision in the merger ratio between Indian Oil and IBP. The boards of the companies had earlier announced a ratio of 1.25 shares of Indian Oil for every share of IBP held by shareholders. The government has reportedly asked for a revised ratio of 1.1 shares of India Oil for every share of IBP.

Canara Bank would spend Rs200 crore to bring nearly half of its more than 2,000 branches on a core banking software platform. The bank had selected the core banking suite of I-Flex for the project which is expected to be completed by next year.

M&M has announced a marginal price hike for its SUV models to offset cost increases.

IDFC has informed the exchanges that it would acquire a close to 20 per cent stake in consultancy firm Feedback Ventures. The latter provides advisory and consultancy services to infrastructure projects. IDFC would also invest Rs10 crore in convertible preference shares of Feedback Ventures.

Mid-Cap Action

Mid-caps could not survive the weakness in the general markets. Though select sectors saw some buying interest, the index closed nearly a per cent lower. The CNX Mid-Cap index lost 39 points and closed the day at 3964.

Television Eighteen group is all set for a restructuring exercise to consolidate the holdings in various channels into a holding company. The group would form a new holding company, Network 18 Holdings, which would hold controlling stakes in CNBC TV18, Hindi channel Awaaz and the English news channel CNN-IBN.

The new holding company would be listed in due course and existing shareholders of TV18 would receive 12 shares of Network 18 for every 10 shares held by them. TV18 stock would be split into shares with face value of Rs5 each and existing shareholders would receive 14 shares of Rs5 each of TV18 for every 10 shares of face value Rs10 held by them.