Markets were subdued in early trades and the indices drifted around yesterday's closing levels till mid-morning. Global cues were mixed and most analysts were expecting further weakness.

To their surprise, the indices started an up move before noon and kept on rallying till the end of the session. The up trend was very broad based and was led by technology and oil & gas stocks, just like yesterday.

Nifty crossed 3600 comfortably and settled well above that level and the Sensex moved past 12500 to end at its second highest closing ever.

Sensex closed with gains of 184 points at 12538 and the Nifty surged 62 points to close at 3621. Nifty October futures closed at a premium of 10 points to the spot index.

Tech stocks sustained the rally from yesterday and ended with very good gains. TCS added more than 3.5 per cent for the second straight day while HCL Tech was the best performer from the sector, adding 4.5 per cent. Wipro gained over 3 per cent while Infosys added over 2 per cent to yesterday's 4.5 per cent move.

Oil marketing stocks saw a sharp surge as crude oil prices declined to their 2006 lows. HPCL was the best performer among index stocks, rallying nearly 6.5 per cent. BPCL added close to 3 per cent.

Reliance Industries gained well over 2 per cent and became the most valuable Indian company, overtaking ONGC. The latter ended with gains of less than 0.5 per cent.

SAIL bounced back sharply after yesterday's 3.5 per cent fall and surged over 4.5 per cent. Tata Steel ended nearly 2 per cent higher.

HDFC sustained the uptrend and rallied nearly 4.5 per cent
Among engineering stocks, Siemens gained over 3 per cent and ABB rallied over 3.5 per cent.

VSNL resumed its rally and ended nearly 3.5 per cent higher.

Zee Tele was another major gainer, adding close to 4 per cent.

There were only four losers among Nifty stocks. HLL continued it's down trend and lost more than a per cent.

HDFC Bank remained subdued throughout the session and closed more than 0.5 per cent lower.

Tata Power lost over 0.5 per cent and Hero Honda ended with marginal losses.

Global markets / crude oil
US markets declined modestly after the scare caused by a small aircraft crashing into a New York building. Minutes of the last Fed meeting did not give any clues about an early interest rate cut.

Some of the corporate earnings declared in recent days have disappointed while controversies over grant of stock options continue to trouble many tech companies.

The Dow lost close to 0.15 per cent and the S&P 500 index closed with losses of over 0.25 per cent. Technology stocks also corrected and the NASDAQ slipped more than 0.3 per cent.

Asian markets were mixed after yesterday's downtrend. Shanghai lost more than 0.65 per cent while Japan and Indonesia ended around 0.2 per cent each lower. Singapore ended with marginal losses.

Thailand saw a strong up move and closed 1.7 per cent higher.

Malaysia and South Korea ended around 0.5 per cent each higher and Hong Kong closed marginally higher.

Most European indices opened with modest gains and are holding on to their levels in early afternoon trades. Major indices are trading with gains of close to 0.25 per cent each.

Crude oil prices slipped further yesterday and settled close to their lows for 2006. Near month NYMEX futures lost 93 cents per barrel to settle at $57.59 per barrel yesterday. The commodity has declined further and is trading below $57.5 in European trades today.

Large-cap news flow

• Reliance Industries has submitted a joint bid with Engineers India for the revival of a Libyan oil refinery, according to media reports. The company has also reduced retail fuel prices to the same level of PSU oil marketing companies.
  
  
• Reliance Industries may de-merge its oil and gas exploration business into a separate company, according to unconfirmed media reports. US-based oil major Chevron, which holds a minority stake in Reliance Petroleum, may be inducted as a strategic partner in this company as well according to these reports.
  
  
• BHEL has received an order worth Rs950 crore from a new refinery project being set up by BPCL and an Oman coil company.

Mid-Cap Action

Mid-caps and small caps opened with decent gains but saw some volatility in morning trades. They gained as the large caps started their sharp rally, but gains by the end of the day were lower than large caps.

The CNX Mid-Cap index ended with gains of 42 points, or 0.89 per cent, to finish the day at 4776. BSE mid-cap index gained 0.78 per cent and the BSE small cap index added 1.08 per cent.

Dhanalakshmi Bank and TIL Limited ended the day locked in 20 per cent upper circuits.

Shringar Cinema was locked in 10 per cent upper circuit on media reports that both Reliance Industries and R-ADAG are trying to acquire a majority stake in the company.

DS Kulkarni, Eastern Silk and BBTC were also locked in the 10 per cent upper circuits.

Indo Count, Rain Calcining and REI Agro were among the other major mid-cap gainers.

Tata Sponge, Apollo Tyres, Khandwala Securities, Induj Enertech, SPIC, Sona Steering, Lakshmi Precision Screws and Crompton Greaves were among the major mid-cap losers.

Mid-cap news flow

• Granules India would acquire a 50-per cent stake in a JV with a Chinese company to manufacture and market ibuprofen. The JV would take over the existing manufacturing assets of the Chinese company.
  
  
• Torrent Pharma would market a Chinese cardio-vascular drug under license in India. The company expects annual revenues of Rs20 crore from this drug within 2 years of launch.
  
  
• Aptech Limited would acquire a 70-per cent stake in a domestic privately held company for Rs3.5 crore. The company would infuse an additional Rs5 crore over the next 2 years.
  
  
• Liberty Shoes said its three plants affected by labour unrest would return to normalcy by end of this year.
  
  
• Indo Asian Fusegear has received an export order worth Rs21 crore from Saudi Arabia.
  
  
• Noida Toll has terminated the arbitration proceedings against its EPC contractor. All claims and dues between the parties have been settled.
  
  
• 3i Infotech has launched a new software suite for the apparel sector.
  
  
• First Carlyle Ventures, a private equity investor, has acquired a nearly 5-per cent stake in Allsec Technologies in an off-market deal. First Carlyle had earlier come out with an open offer for Allsec shares.
  
  
• Bombay Burmah Trading Corp has started commercial production at its laminate plant in Uttaranchal.
  
  
• Shringar Cinema would get entertainment tax benefits for its multiplex in West Bengal.
  
  
• Rajesh Exports has launched two more retail jewellery stores, one in Delhi and another in Jammu, taking the total number of retail stores to six.
  
  
• Asian Electronics has allotted 21 lakh equity shares at a price of Rs460 per share to institutional investors.
  
  
• Kanishk Steel has received High Court approval for the merger of 2 privately held companies.
  
  
• WS Industries has allotted 42,200 shares at a price of Rs4,325 per share and 50 lakh convertible preference shares of Rs10 each to an overseas investor.
  

*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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