Indices unable to hold higher levels

Rex Mathew
16 March 2005

Markets opened on the back of rising crude prices and a weak US market overnight, but was firm in early trades. Till noon it looked like the market would break its three day losing run and manage a small rally. Such hopes were belied as the indices took a downturn in the afternoon, possibly because of lower FII activity. Sensex closed at 6747, down a marginal 5 points and the Nifty at 2126, down 3 points. The Nifty futures discount to the spot index narrowed to 6 points.

Inflation worries continue to keep US markets down. Crude remains firm even as winter comes to an end and continues to trade around the $55 to a barrel mark. The Dow closed half a per cent down while NASDAQ lost three fourths of a per cent. Indian ADR's declined further in the general weakness in market, with the exception of ICICI Bank which ended its weak trend to close with gains of a per cent. VSNL was the major loser with losses of more than 4 per cent while Tata Motors, Satyam and HDFC Bank lost further ground.

The day belonged to private sector banking major ICICI. The stock which had gone through a correction over the last few days rallied over 5 per cent to an intra-day high of Rs407 before closing at Rs401. The bank is expected to price its sponsored ADR issue in a few days. The market expects the price to be over Rs400 as the ADR is currently quoting above this level. IPO by group company 3i Infotech may also act as another trigger for this stock.

Petroleum marketing companies had a good day with HPCL leading with gains of 2 per cent. BPCL and IOC also closed in the green. Sections of the market may be expecting a price hike after the union cabinet meeting scheduled later for the day even though the oil ministry has ruled out any price hike this month.

Steel stocks continued to rally with both Tata Steel and SAIL touching new yearly highs today. SAIL closed with gains of more than 2 per cent while Tata Steel closed in the red.

Nalco was the other major gainer among index stocks on the back of rising aluminum prices. Among the tech pack, TCS remained firm while Infosys, Wipro and Satyam closed with losses.