Indices correct on profit booking after new intra-day highs

05 January 2006

Asian markets were generally firm today, helped by the positive closing by US markets yesterday. Malaysia and Shanghai ended higher by more than a per cent each while Japan and Hong Kong gained close to half-a-per cent each. Korea was the only major loser, closing more than half-a-per cent lower.

Indices opened on a flat note but soon found strength as the Sensex surged to a new lifetime intra-day high of 9680. The Nifty recorded a new high of 2916.

Markets slipped sharply in mid-morning trades as traders resorted to selling at higher levels. Within an hour of opening, the Sensex had given up more than 100 points from the highs of the day.

Selective buying in cement and auto stocks helped the indices to claw back into positive territory by noon. More volatility saw them slipping in and out of the red before closing lower.

Gail India was the biggest gainer among index stocks, closing nearly 4 per cent higher. BPCL gained close to 2 per cent while HPCL gave up more than a per cent.

Gujarat Ambuja Cements continued to buzz around on speculation of a stake acquisition by Holcim. The stock gained over 3 per cent in early trades on the back of a more than 8 per cent surge yesterday before slipping and closing marginally lower.

Grasim was the best performer in the cement space, gaining nearly 3 per cent.

PSU bank stocks had a good day as SBI gained over 2.5 per cent followed by PNB which closed 2 per cent higher. Among the private sector banks, ICICI Bank lost nearly 1.5 per cent.

Hero Honda and Maruti were the best performers in the auto sector, closing more than a per cent each higher. Tata Motors lost nearly 2 per cent while M&M lost over 1.5 per cent.

HCL Tech, BHEL, ABB and Glaxo were the other gainers among index stocks.

Dabur was the biggest loser among index stocks, closing nearly 2 per cent lower. Among other FMCG stocks, ITC closed a per cent lower.

Technology stocks Satyam and Wipro gave up around 1.5 per cent each.

SAIL, Tata Steel and MTNL were the other losers among index stocks.

Sensex closed at 9618, a loss of 30 points, and the Nifty at 2900, lower by 4 points. Nifty January futures closed at a discount of 16 points to the spot index.

US indices maintained their uptrend yesterday also as technology stocks continued to find favour with investors. Firm trend in crude oil prices helped the oil stocks to maintain their levels.

The Dow and S&P 500 added around one-third of a per cent each. Gains on the NASDAQ were higher at close to a per cent.

Crude oil held above the $63 per barrel mark yesterday on expectations of lower US inventory levels. The resolution of a natural gas supply dispute between Russia and Ukraine did not have much of an impact on prices. January futures on the NYMEX closed at $63.42 yesterday, a gain of 28 cents from the previous close. The commodity is trading with marginal gains in early European trades today.

Unconfirmed reports indicate that European cement major Holcim is eyeing a 26-per cent stake in Gujarat Ambuja Cement. Holcim and Gujarat Ambuja had teamed up to acquire a controlling stake in ACC earlier. Holcim has reportedly dismissed the news as market speculation.

According to reports in the European media, Tata Power is one of the possible buyers for the Austrian hydropower business of German major Siemens. The business is being sold off as a pre-condition to get regulatory approval for Siemens' bid to acquire an Austrian company. Siemens is reportedly expecting a valuation of over $350 million for the unit.

L&T has completed the issue of Yen-denominated convertible bonds and has raised $100 million. The zero-interest bonds are convertible into GDR's after five years at a 35 per cent premium to the current market price.

ABB has won an order from ONGC for supplying a control and data acquisition system to manage information from exploration and production bases. The order is reportedly worth $95 million.

NTPC is reportedly in the market to raise foreign funds from a bond issue. According to reports, the company may issue 10-year bonds and has appointed two banks for the issue. Further details are not available.

MTNL is planning to upgrade its mobile telephone network in Mumbai to increase capacity by 3-lakh lines. The company would add equal number of new lines in both CDMA and GSM networks. MTNL would also offer streaming video through its broadband services within the next few months.

HCL Technologies has teamed up with Canada-based enterprise content management company Hummingbird to service clients in the Asia-Pacific region. The two companies would target clients in manufacturing, oil, insurance and banking sectors. The range of services includes risk management, litigation management and compliance management.

Mid-Cap Action

Mid-caps maintained their strength for the fourth straight session even as the frontline indices came under selling pressure. The CNX Mid-Cap index gained 30 points and closed the day at 4177, a new lifetime high.

Shakti Sugars is planning to export 80,000 tonnes of sugar by September of this year, to meet part of its export obligations. The company had imported 240,000 tonnes of raw sugar for processing and selling in domestic market and is required to export and equal quantity by 2008.

Pharma company JB Chemicals announced that it has entered into an agreement with an Israeli drug company for product research and development. The stock had gained significantly yesterday.

There is strong market speculation that pharma company Shasun Chemicals is close to acquiring a German generics company with considerable research capabilities. The stock has appreciated nearly 20 per cent over the last week.