August 3, 2006 | Domain-b.com

Helped by fairly firm global markets, indices sustained the momentum from yesterday and started on a very strong note. The Sensex scaled the 11000 mark after a one-month gap in morning trades and the Nifty went past 3200.

After touching the highs of the day around noon, the indices drifted down but held on to most of their gains till late in the afternoon. The last hour saw a sharp slide, mostly because of weakness in index heavies ONGC and Reliance Industries, and the indices gave up all their gains in the closing minutes.

Though both the Sensex and Nifty slipped into the red in the last 10 minutes of the day, last half hour averaging helped them to close the day on a modestly positive note. ECB and Bank of England attributed the last hour selling to the rate hike announcements.

Sensex closed with gains of 47 points at 10923 and the Nifty gained 8 points to close at 3190. Nifty August futures ended at a discount of 28 points to the spot index.

As expected, Ranbaxy was the star of the day after the longawaited favourable verdict in the Lipitor patent challenge case in US. The stock added nearly 4 per cent and was the best performer among index stocks.

Private sector banking stocks did well today after yesterday's decline. HDFC Bank added close to 2.5 per cent while ICICI Bank lost close to 2 per cent. HDFC ended with gains of close to 3 per cent.

Among autos, Tata Motors and Bajaj Auto added close to 1.5 per cent each. Maruti added over a per cent.

ABB continued it's up trend and added close to 3 per cent.

Bharti and Grasim were the other major gainers among Nifty stocks.

There were only three losers among Nifty stocks till early afternoon, but the numbers swelled later. Gail India slipped further and was the worst performer today, closing nearly 2.5 per cent lower.

BHEL came under profit booking after gaining substantially over the last many sessions and lost over 1.5 per cent.

Jet Airways started on a firm note, but lost direction in afternoon trades and closed more than 1.5 per cent lower.

FMCG stocks were weak as analysts are still sceptical of pricing power and continue to worry about margin pressures. HLL and Tata Tea gave up 1.5 per cent each while Dabur and ITC closed nearly a per cent each lower.

Index heavyweights, ONGC and Reliance Industries, were firm for most of the session before declining towards the end and closing with modest losses.

Nalco and OBC were the other major losers among index stocks.

Global markets / crude oil
Strong corporate numbers from giants like P&G and Time Warner helped the US markets to recover yesterday, despite further gains in oil prices. Hopes of a pause in interest rate hikes have also started building up ahead of the next US Fed meeting on Tuesday.

The Dow closed with gains of more than 0.65 per cent and the S&P 500 closed with gains of around 0.6 per cent. Technology stocks did better and the NASDAQ ended with gains of over 0.8 per cent.

Most Asian markets gave up part of their early gains and closed modestly higher. Thailand was the best performer, adding more than a per cent. Japan, Hong Kong, Malaysia and Singapore ended with more marginal gains.

Indonesia lost over a per cent while South Korea declined 0.25 per cent.

European markets opened on a modestly weak note before declining on the rate hike announcements from ECB and Bank of England. Weak corporate results have added to the pressure and major indices are trading with losses of around a per cent each.

Crude oil prices surged yesterday on forecasts of a named storm becoming a hurricane, which would threaten oil installations in the Gulf of Mexico. Near month NYMEX futures closed with gains of 90 cents at $75.81 per barrel. The commodity has corrected nearly a per cent in European trades today, following fresh forecasts that the hurricane threat may be receding.

Large-cap news flow
● Ranbaxy would be able to launch a generic version of cholesterol lowering drug atorvastatin by March 2010, more than a year before the earlier target of June 2011, following a US court verdict in its favour. Atorvastatin, marketed by Pfizer as Lipitor, is the world's largest selling drug with current annual sales of $8.5 billion. Ranbaxy would also have 180-day product exclusivity in the US after its launch.

● Mahindra & Mahindra has declined to confirm or deny media reports that the company would acquire a stake in Ramkrishna Forgings.

● The board of GE Shipping has decided that it was not possible to complete the de-merger of its offshore services business into a separate company within the time limit set by Bombay High Court. The board would consider new possibilities for restructuring the business in due course.

Mid-Cap Action

Mid-caps and small caps started the day on a very positive note with the small caps performing better than others. The mid-caps started drifting down before noon and gave up most of their gains in the last hour slide. Small caps, however, resisted the decline to a great extent and closed with good gains.

The CNX Mid-Cap index finally ended with gains of 20 points, or 0.51 per cent, to end the day at 3926. BSE mid-cap index gained 0.83 per cent and the BSE small cap index added 1.17 per cent.

Sugar stocks surged today after losing considerably over the last 2 months. Simbhaoli Sugar and Uttam Sugar were the major gainers, closing with gains of over 15 per cent each. Dwarikesh added 12.5 per cent while Dhampur and KCP Sugar gained over 10 per cent each.

Today's writing, Munjal Auto, Emami, JK Industries and Subhash Projects were among the other mid-cap gainers.

Jagran Prakashan, Panacea Biotech, Astra Microwave, Inox Leisure, DS Kulkarni, Alok Textiles and GKW were among the major mid-cap losers.

Mid-cap news flow 

● IndiaBulls has issued 1.15 crore convertible preference shares of Rs300 each to a unit of hedge fund Farallon Capital. The preference shares are convertible at a price of Rs300 per share. The company has also issued 99.67 lakh non-convertible preference shares of Rs300 each to the same entity.

● Trent Limited would raise up to Rs130 crore from a rights issue of equity shares and an additional Rs200 crore from an issue of non-convertible bonds with warrants on a rights basis.

● A public offer has been made to acquire up to 21.56 per cent of Avery India from minority shareholders at a price of Rs55 per share, following a change in ownership. The company's UK-based parent was acquired by another UK-based entity.

● SpiceJet is planning to add 23 new aircrafts by end of 2008 and would operate around 250 daily flights by then. The company would induct 5 new aircrafts to double its fleet size by January 2007.

● Thomas Cook India has declined to comment on media reports that the company is in discussions to buy out travel services company TCI for Rs200 crore.

● Glenmark Pharma has received regulatory permission to start phase II clinical trials for an anti-diarrhoeal drug.

● Nucleus Software has won an order from a large Nigerian bank for implementing its software suite for managing lending and collections across 350 branches.

● Jain Irrigation has received orders worth Rs80 crore for supplying mango pulp to various customers. The company expects revenues of Rs95 crore from mango pulp during the current financial year, of which exports would be Rs70 crore.

● Provogue India said its mall development and management subsidiary would open the first shopping mall in Rajkot tomorrow.

● HFCL has raised the FII investment limit to 74 per cent.

● Ansal Buildwell would issue securities to raise up to Rs250 crore

● Mercator Lines has redeemed the outstanding nonconvertible debentures totalling Rs4.5 crore.

● Satnam Overseas has changed the company name to Kohinoor Foods.

● Yes Bank has raised the FII investment limit to 49 per cent and NRI investment limit to 24 per cent, from 24 per cent and 10 per cent respectively.

● Dhampur Sugar would consider issuing convertible preference shares in lieu of zero coupon loans given by financial institutions.

● Shareholders of GNFC and Narmada Chematur have approved the merger of the 2 companies.

● Amar Remedies would consider raising FII investment limit to 45 per cent from 24 per cent.

● Shreyas Shipping has lost a vessel built in 1979 due to rough weather.

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