It was a day of further consolidation for the markets, despite the weakness across Asian markets. Some of the gainers in recent sessions were subdued while stocks of companies, which are expected to come out with good results, attracted buying interest. Recovery in crude oil prices was the other major factor influencing today's trading.

The indices opened weak in line with the Asian trend and moved sideways till mid-morning. They recovered by noon and traded with modest gains till mid-afternoon. The last hour saw some pressure and the indices gave up their gains and drifted into the red.

Sensex closed with losses of 7 points at 12366 and the Nifty lost 3 points to close at 3567. Nifty October futures closed at a premium of 8 points to the spot index.

Select banking and financial stocks continued to correct today as well. HDFC was the worst performer among index stocks, losing more than 2.5 per cent. OBC ended with losses of close to 2 per cent.

Tata Steel slipped, despite continued media reports of a possible bid on European steel company Corus. The stock ended with losses of nearly 2 per cent.(See: )

The recovery in crude oil prices affected oil marketing stocks. HPCL lost nearly 1.5 per cent and BPCL ended nearly 0.5 per cent lower.

Reliance Industries slipped nearly a per cent and was a major drag on the indices.

Higher oil prices pulled down M&M by 1.5 per cent and Jet Airways by nearly a per cent.

Reliance Energy was another major loser, ending nearly 2.5 per cent lower.

Suzlon continued to correct and lost nearly 2 per cent.
HLL also lost further ground and ended nearly a per cent lower.
Technology stocks found buyers ahead of their results announcements. Infosys was the best performer in the sector, adding well over a per cent. TCS gained close to a per cent and Satyam ended more than 0.5 per cent higher.

Cement stocks continued to attract buyers. Grasim and Gujarat Ambuja gained around 1.5 per cent each. However, ACC gave up more than 0.5 per cent.

L&T was the best performer among index stocks, rallying close to 2 per cent.

Tata Motors gained nearly a per cent on reports of a product price hike.

Cipla, Bharti and Zee Tele were the other major gainers.

Global markets / crude oil
Asian markets, except Shanghai, lost ground on reports of the nuclear test by North Korea, which has heightened security concerns in the region. South Korea was the biggest loser, declining nearly 2.5 per cent followed by Hong Kong, which lost more than 1.25 per cent.

Singapore declined more than a per cent while Thailand, Indonesia and Malaysia ended with more modest losses. Shanghai rallied close to 1.9 per cent while Japan was closed for the day.

European indices had a weak opening but select indices have recovered in early afternoon trades.

Crude oil prices bounced back above $60 per barrel after the OPEC decision to cut daily production by 1 million barrels. The nuclear test by North Korea has also made the markets worried about supplies from the northern fields of Russia. Near month NYMEX futures gained another per cent to settle at $60.03 per barrel yesterday. The commodity has lost modest ground and is trading around $59.75 in European trades today.

Large-cap news flow

• NTPC has offered a 40-per cent stake in its gas-based power project in Kerala to Qatar, according to media reports. The Kerala plant currently has a capacity of 350 MW which is proposed to be enhanced to nearly 2,000 MW. Natural gas required for the project would be imported from Qatar through the Kochi port by Petronet LNG.
  
• Tata Motors has raised the prices of buses and trucks by up to 2 per cent to take care of rising input costs.
  
• The board of Indian Hotels would meet later this week to consider the merger of 6 group entities with the company. Most of these entities own and operate individual properties.
  
• TCS has commissioned an integrated logistics management and inventory control software suite for the Indian Air Force.

Mid-Cap Action
Mid-caps and small caps were once again unaffected by the subdued trend in large caps. Buying interest was strong in many stocks even as some of the major gainers in recent weeks continued to correct. They opened higher and rallied ahead in afternoon trades to end with good gains.

The CNX Mid-Cap index ended with gains of 26 points, or 0.51 per cent, to finish the day at 4801. BSE mid-cap index added 0.65 per cent and the BSE small cap index outperformed for the second day with gains of 1.18 per cent.

Stocks of pipe manufacturers for the oil & gas sector attracted very good interest. Man Industries rallied nearly 17.5 per cent while PSL gained more than 11 per cent.

TN Petro closed the day locked in the 20 per cent upper circuit.

Atlanta Limited, Shriram City Union, HOV Services, Assam Company, Mukand Engineering, BPL and Shivalik Global were among the other major mid-cap gainers.

Select realty stocks corrected, led by Ansal Housing, which lost more than 7 per cent, and Unitech, which was locked in 5-per cent down circuit.

Educomp continued to lose ground and ended 5 per cent lower.

Crew BOS, Celebrity Fashions, Mirza International, Indo Count, Binani Industries and Mirc Electronics were among the major mid-cap losers.

Mid-cap news flow

• Man Industries has won new orders worth Rs600 crore for pipes from the US and Nigeria. The company said it has participated in large tenders in the US and Latin America.
• Geometric Software has denied media reports that promoters are in discussions to sell the company.
• E-trade, the US-based online stock broking company, has today launched its open offer for 20 per cent of IL&FS Investsmart.
• IID Forgings has formed a JV with 2 US-based companies for retail distribution business. The company would hold a 51 per cent stake in the JV.
• A consortium led by Dolphin Offshore has won a $32 million order from ONGC, which would be completed in phases by 2008.
• Tricom India would acquire a service bureau in the US to facilitate its BPO business.
• K Sera Sera said a new television serial produced by its subsidiary is being telecast from today.
• Shareholders of Visaka Industries have approved the merger of a private entity with the company.
• Classic Diamonds has started distributing premium jewellery through retailers based in the Middle East.
• Tata Metalliks would reline its blast furnace at a cost of Rs17 crore which would raise its capacity to 1.89 lakh tonnes.
• Patel Engineering has received 2 new orders of railway projects worth Rs176 crore.
• Rajesh Exports has launched 2 more retail stores in Gujarat.
• i-Flex has upgraded its core banking software suite Flexcube with SWIFT messaging capabilities.
• The buy back offer of Abbott India at a price of Rs650 per share would open on 06 November
• Fortune Informatics would issue 2.5 lakh equity shares and 5 lakh convertible warrants to specified investors.
• The board of Sulzer India has decided to convene an EGM of shareholders to consider the de-listing offer from parent company Sulzer Switzerland.
• The board of Fedders Lloyd would meet next week to consider an overseas issue.
• The board of Sanghi Industries would meet this week to consider the issue of 20 lakh equity shares to promoters on a preferential basis.
  

*Disclaimer: The author may have positions in some of the stocks specifically mentioned above at the time of writing this article. This analysis / report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content the author or publisher shall not be held responsible for any loss caused to any person whatsoever.

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