Sensex ends 89 points lower; technology stocks correct

After two sessions of good gains, frontline Indian indexes came under selling pressure today. Despite the weakness in other major Asian markets, the indexes opened higher before slipping. They recovered all their losses by early afternoon, only to decline again later in the day.

Sensex closed with losses of 89 points at 13607 and the Nifty lost 28 points to end at 3985. Nifty April futures closed at a discount of 10 points to the spot index.

Technology stocks came under selling pressure after two days of gains. Satyam was the worst performer, closing 4.92 per cent lower. HCL Tech declined 2.48 per cent and Infosys lost 2.16 per cent

TCS, which announced results which were in line with expectations yesterday, ended 2.34 per cent lower. Wipro ended with losses of 2.01 per cent.

Suzlon Energy saw some correction after the spectacular rise in recent sessions and closed 3.66 per cent lower

Metal stocks were the other losers today. Sterlite Industries lost 3.59 per cent while SAIL ended 3.28 per cent lower.

Auto stocks lost ground in the afternoon. Tata Motors gave up 2.62 per cent and Maruti lost 2.04 per cent

Cipla was the other major loser among Nifty stocks, losing 2.49 per cent

Oil & gas stocks were the best performers today and played a major role in preventing further losses on the indexes. HPCL was the best performing Nifty stock, with gains of 4.52 per cent. BPCL added 3.37 per cent

Reliance Petroleum added 2.01 per cent while Reliance Industries ended 1.24 per cent higher. IPCL gained 1.02 per cent

Cement stocks continued their rally from yesterday, but gave up part of their gains in afternoon trading. ACC added 2.98 per cent while Gujarat Ambuja added 1.34 per cent

Among pharma stocks, Glaxo gained 1.55 per cent and Sun Pharma added 1.41 per cent

Bajaj Auto was the other major gainer, adding 2.38 per cent

Global markets / crude oil
US markets rallied yesterday on better than expected results from major companies like Citigroup. Heightened mergers and acquisitions activity and better than expected retail sales data for the month of March also helped the sentiment

The Dow ended 0.85 per cent higher and the S&P 500 index surged nearly 1.1 per cent. Technology stocks also extended their gains and the NASDAQ closed 1.05 per cent higher

Most Asian markets were subdued in morning trading, but some of them recovered later. Malaysia led the region with gains of 0.55 per cent while Shanghai continued its good run and closed nearly 0.45 per cent higher. Thailand gained more than 0.35 per cent and Hong Kong closed 0.15 per cent higher.

Japan corrected today and the Nikkei closed more than 0.55 per cent lower while South Korea ended more than 0.2 per cent lower

European markets had a weak opening today and remain subdued. Major European indices are trading with losses of between 0.45 per cent and 0.7 per cent each in afternoon trades.
Crude oil prices remained more or less unchanged yesterday after the previous week's correction. Near month NYMEX futures ended at $63.61 per barrel yesterday and have moved past $64 per barrel in European trading today.

Large-cap news flow

• Jet Airways may invest up to $3.7 billion to acquire wide-bodied aircraft over the next few years. These new aircraft would be deployed in international routes and would have innovative seating configurations
• L&T has signed an agreement with Mitsubishi Heavy for manufacturing super critical boilers. The Rs300 crore facility would produce boilers for power plants in the capacity range of 500 MW to 1,000 MW
• IPCL has re-started operations at it's Allahabad unit which was shut down following labor unrest
• Dr. Reddy's said it has signed up as the first participant of a pharmaceutical ingredient verification program in the US
• JSW Steel has started production at one of its furnaces which was shut down in February following a fire incident
• Hindalco has confirmed that Alcan, its JV partner in Utkal Alumina, has indicated its desire to sell off its stake. Hindalco has the right to acquire Alcan's stake, but is yet to evaluate the terms and conditions of such a transaction
• Wockardt has signed a licensing agreement with a US-based company to introduce a new drug for the treatment of scars in the domestic market.

Mid-Cap Action
Mid-caps and small caps tried to hold on to yesterday's closing levels, but declined in the afternoon. The CNX Mid-cap index lost 10 points, or 0.2 per cent, to end at 5089. The BSE mid-cap index lost 0.79 per cent and the BSE small cap index closed 0.31 per cent lower.

Kopran and Aegis Chemicals closed at 10 per cent upper circuits.

Cambridge Technology continued its good run and rallied 16.79 per cent after yesterday's gains of 13.91 per cent.

C & C Constructions, Lloyd Engineering, Alfa Laval, GTC Industries, Numeric Power Systems, Welspun India and Philips Carbon Black were the other major gainers among mid and small-caps

Orbit Corporation, which had gained substantially since listing last week, ended 7.31 per cent lower

Punjab Chemicals, IL&FS Investsmart, Infomedia India, Hexaware, Evinix, Blue Bird, Prime Focus, Ramco Industries and Page Industries were the other major losers among mid-cap and small-cap stocks

Mid-cap news flow

• Sunil Hitech has won new orders worth Rs82 crore for work related to power stations
• KS Oils would source mustard oil from another manufacturing facility, till the company's new facility goes on stream next year.
• Geometric Software has released a new version of its software to measure wall thickness
• Rashtriya Chemicals has clarified that the company has not finalized any joint venture agreements in West Asia
• West Coast Paper has resumed work at one of its divisions, which was shut down following labor unrest
• Plethico Pharma is planning an acquisition in Germany in the herbal segment
• Lanco Infratech said an IT SEZ project of one of its subsidiaries in Andhra Pradesh has been notified by the government
• Redington India has signed an agreement to distribute music players and computers of Apple Inc in India
• ING Vysya Bank has sold off its entire stake in ING Investment Management
• Jindal Steel and Power said Jindal Steel Bolivia has become a subsidiary.
• CESC would merge the holding entity of national level retail store chain Spencers with the company
  

Thomas White Global Research, part of the Thomas White International Group, publishes capital market research for global institutions and investment banks.

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