Indices close with modest gains as major Asian markets decline

15 February 2006

The indices opened with significant gains today as the global cues were positive. The strong closing by the US indices yesterday helped improve sentiments across most Asian markets early today.

The Sensex recorded a new lifetime intra-day high of 10192 early in the day while the Nifty went very close to its all time high.

The tide turned very fast in Asian markets and most of the prominent Asian indices went into the red. The Indian indices also saw a steady decline after the strong opening and by noon both indices were trading with losses.

After trading sideways for some time, the markets staged a minor recovery in the last hour of trading. Strong gains in FMCG and non-ferrous metal stocks helped the indices to close with modest gains.

HLL continued its rally from yesterday after a major foreign brokerage upgraded the stock after the results announced yesterday. The stock added more than 5 per cent to yesterday's 7 per cent gain.

The rally in HLL helped ITC also and the stock saw a sustained rally in the afternoon. ITC finally closed nearly 4.5 per cent higher.

Aluminium stocks made a big come back, led by Nalco. The stock added more than 4 per cent while Hindalco gained nearly 3 per cent.

Ranbaxy, MTNL, Grasim and Jet Airways were the other major gainers among index stocks.

Bajaj Auto was on fire today, continuing the strong rally from yesterday. The stock finally closed with gains of nearly 5 per cent.

Some of the other auto stocks, led by M&M, came under pressure today. The stock lost more than 2.5 per cent. Maruti declined nearly 2.5 per cent while Hero Honda closed more than a per cent lower.

Reliance Industries and Reliance Energy both closed nearly 2 per cent each lower.

ONGC recovered from an early afternoon slump which saw the stock losing more than 2.5 per cent.

L&T also saw a sharp decline in early afternoon trades which took the stock lower by nearly 3.5 per cent. The stock recovered later and finally closed nearly 1.5 per cent lower.

Among the financial sector stocks, HDFC lost nearly 2.5 per cent while PNB declined nearly 1.5 per cent.

Infosys lost more than 1.5 per cent while HCL Technologies recovered part of its early losses.

Sensex closed at 10113, a gain of 27 points, and the Nifty at 3022, higher by 4 points. Nifty February futures closed at a discount of 10 points to the spot index.

US markets bounced back sharply yesterday as oil prices declined, listing market sentiment. Retail sales data for the month of January was also encouraging which further supported the markets. Traders are waiting for the first public statements on the economy and interest rates by the new chairman of the US Fed, who is scheduled to testify before the US Congress.

The Dow closed with gains of 1.25 per cent, one of the best daily performances by the index in recent months. S&P 500 and NASDAQ indices added a per cent each.

Crude prices declined to their lowest level this calendar year as US inventory build up continues to be strong. US fuel stocks are expected to show an increase in the weekly data to be released later today. March NYMEX futures closed at $59.57 per barrel yesterday. The commodity is trading with marginal gains in early European trades today.

MRPL would invest Rs12,800 crore over the next 3-4 years to upgrade its refinery and set up an aromatics complex. ONGC, the parent company of MRPL, has to approve the investment plan and decide on funding.

Ranbaxy gas confirmed that it has bid for a German drug company and said it is one of the bidders and it is too early to predict the result of the bid. Though the company has not specifically identified the German company, it is believed that the German generic drugs company Betapharm is the target.

Dr. Reddy's has also reportedly bid for Betapharm. According to media reports and market speculation, Ranbaxy has revised its bid to 500 million Euros after Dr. Reddy's bid 450 million Euros.

SBI has launched a co-branded credit card in association with the Tata group. The bank management said it is yet to take any decision on interest rate hikes though there is definitely some pressure on liquidity.

TCS has denied US media reports that some US-based employees of the company have initiated legal action against the company. TCS said it has not received any legal notices so far.

HPCL has executed an agreement to avail external commercial borrowing in Japanese Yen to the equivalent of $200 million. The funds from the 5-year facility would finance capital expenditure.

GE Shipping has contracted to acquire a double hulled crude oil tanker with a capacity of 110,000 DWT. The new tanker would join the company's fleet this quarter itself.

IDBI has denied media reports that it has approached the government to acquire a large PSU bank.

Mid-Cap Action

Mid-caps also declined around noon, after a firm opening. Though heavy buying was seen in select stocks, with most of them locked in the upper circuit, most others came under selling pressure. The smaller stocks could not recover in the closing minutes. The CNX Mid-Cap index lost 12 points to end the day at 4427.

Entertainment Network, the company which owns popular radio channel 'Radio Mirchi', got listed on the exchanges today. Issued at Rs162 per share, the stock opened at Rs250 on the NSE before closing at Rs265.

US bank Wells Fargo has selected the software package for managing Basel II norms from I-Flex. The software helps banks to calculate the required capital adequacy based on the risk profile of assets. Financial details of the order have not been disclosed.

Aban Loyd Chiles Offshore has received the letter of intent from ONGC for hiring a drilling rig for a period of 3 years. The order is worth Rs400 crore.