Market Wrap

Weak global markets infect Sensex 

Concerns that FII inflow may slow down due to weakness in the Indian rupee against the US dollar and a subdued to weak trend in global markets triggered a correction on the bourses today. A host of small- and mid-cap stocks meandered lower, and some side counters like Voltas and GE Shipping proved volatile.

Select stocks made headway on renewed buying in an otherwise subdued market.

The 30-share BSE Sensex lost 75.49 points or 0.8% to 8,724.47. The S&P CNX Nifty shed 18.95 points or 0.71% to settle at 2,644.40.

Asian and European stocks were in decline on Wednesday, aping their US counterparts following comments from three Fed officials who made it quite clear that the US central bank will keep raising interest rates to keep inflation at bay.

Turnover declined on BSE, at Rs 3,336 crore compared to Tuesday’s Rs 3,835 crore.

The weakening of the rupee against the dollar has set off fears that FII inflows into India may slacken. The rupee struck a fresh 10-month low today before recovering from the lower level. FII inflows have beem a telling influence on the how the Indian bourses moved (upward) this year. The cumulative FII inflow in calendar 2005 has reached $ 8.65 billion (till 4 October 2005), as compared to an inflow of $ 8.51 billion in whole of calendar 2004.

The Sensex has been mounting up in the past few days on the back of data indicating strong GDP growth in Q1 June 2005, a heavy monsoon this year, along with expectations of robust Q2 September 2005 results. From a recent low of 8,221.64 on 22 September 2005, the Sensex has spiraled up 578.32 points or 7% in a short while to a lifetime closing high of 8,799.96 on 4 October 2005.

ICICI Bank was the subject of a sell-off today after the private sector bank said it would consider further issue of equity capital in a board meeting on 13 October 2005. Index heavyweight Reliance Industries (RIL) turned out volatile, oscillating between positive and negative territory.

Software major Infosys managed a rebound from the lower level as the company is expected to come out with buoyant Q2 results. Refinery stocks moved upstream following a sharp fall in global crude oil prices. Buying was conspicuous in bearings manufacturers, in select IT stocks, and some power-equipment makers.

Three PSUs – HTM, ITI and MTNL - surged. All the three stocks rose on high volume.

Zee Telefilms spurted on high volume.

Stocks like Mahindra & Mahindra, NIIT, GSFC, Kennametal Widia, Agro Tech Foods, Amtek Auto, Rallis India, Bharat Gears, Amtek India, iGate Global Solutions, Sri Adhikari Brothers, Kinetic Engineering, MM Forgings, Shanthi Gears, FAG Bearings, BASF India, Dabur Pharma, Tamil Nadu Newsprint, Sasken Communication, Wartsila and Blue Dart Express rose between 3% to 8% for the day.

ICICI Bank plunged 4.4% to Rs 563.50. 6.7 lakh shares changed hands in the counter on BSE.

ITC lost 3.5% to Rs 131.75. The stock declined on huge volume of 69.5 lakh shares.

The launch of its first scooter model failed to boost Hero Honda. The stock lost 1.4% to Rs 752.05.

Hindalco shed 1.7% to Rs 150 and Tata Steel lost 2% to Rs 423.75.

RIL lost 0.5% to Rs 801.55. 17.4 lakh shares changed hands in the counter on BSE.

Media major Zee Telefilms jumped 6% to Rs 186.80. The stock rose on high volume of 36.3 lakh shares. Zee said on Tuesday it has appointed Jagjit Singh Kohli as the CEO of Siticable Network Ltd, a subsidiary of the company. Jagjit Singh Kohli is a cable industry veteran with 20 years experience in various capacities. Kohli founded INCablenet, and pioneered the corporatisation of the cable industry and the MSO concept.

Software bellwether Infosys rose 0.8% to Rs 2,651.55. The software major unveils its Q2 results on 11 October 2005.

Ranbaxy gained 2% to Rs 513. 3.7 lakh shares changed hands in the counter on BSE.

NTPC rose 1.5% to Rs 107.90. 14.7 lakh shares changed hands in the counter on BSE.

Expectations of a hike in cement prices boosted cement scrips. Grasim (up 1.4% to Rs 1,360), Gujarat Ambuja Cements (GACL) (up 0.79% to Rs 76.85) and ACC (up 0.4% to Rs 496.40). ACC staged a solid rebound from the lower level. It recovered from the day’s low of Rs 485.10.

HMT leaped up 16.6% to Rs 106.30. The stock rose on huge volumes of 66.9 lakh shares. ITI advanced 6% to Rs 72.60. 37.4 lakh shares changed hands in the counter on BSE.

MTNL climbed 3.7% to Rs 140.60. 16.7 lakh shares changed hands in the counter on BSE. From a recent low of Rs 127.50 on 30 September, MTNL has risen 10.2% in the past three trading sessions.

IT education major NIIT spurted 8% to Rs 348.10. 3.7 lakh shares changed hands in the counter on BSE.

M&M advanced 3% to Rs 405.70. 6.9 lakh shares changed hands in the counter on BSE. The stock rose for the third day in a row today boosted by strong September vehicle sales.

Chemfab Alkalis flopped 8% to Rs 177 following the announcement of Q2 September 2005 results. For Q2 September 2005, Chemfab Alkalis reported a 23.2% growth in Q2 September 2005 net profit to Rs 3.50 crore compared to Rs 2.84 crore in Q2 September 2004. A sharp surge in tax provision (including deferred tax provision of Rs 1.10 crore) restricted the growth in bottom line. Net sales rose 22.4% to Rs 22.34 crore (Rs 18.24 crore).

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