Indices unable to hold early gains

19 May 2005

Continuing rally in the US markets, declining oil prices and strong rally in most Asian markets all led to the markets opening with a huge positive gap of over a per cent. Technology stocks and select banking stocks lifted the indices.

The indices traded within a band till noon, though with a slight negative bias. News of heavy selling by FII's in the futures segment yesterday saw the markets declining early in the afternoon.

The indices attempted a bounce back later in the afternoon only to give up towards close. Profit booking in the last half hour saw the markets giving up most of the gains made in the morning.

Sensex closed at 6479, up 32 points and the Nifty at 1991, up 8 points. Nifty May futures discount to the spot index widened marginally to 14 points from yesterday's 13 points.

Among Nifty stocks, Bajaj Auto, Infosys and Oriental Bank of Commerce were the major percentage gainers while Reliance Energy, HPCL and Reliance Industries were the major losers.

Yesterday, US markets extended third gains into the third straight day with both Dow and NASDAQ gaining well over a per cent each. The Dow has gained close to 3 per cent in the first three days of the week. The markets turned bullish after data showed the consumer price index, excluding retail fuel prices, remained unchanged for April. The index had gone up for March raising concerns of inflation and faster interest rate hikes by the US Fed. Declining oil prices added to the positive sentiment.