Mkts end firm; CG, IT, pharma, metal stocks gain

The markets have closed on a positive note amid mild volatility through the day in the favour of advances. Capital goods, technology, metal and pharma stocks maintained upside while power, oil, realty and auto stocks remained in the red. Markets ignored higher inflation numbers while reacted positively to the GDP numbers. Market breadth was in the favour of declines. Relaxation in ECB norms also played some role.

Inflation numbers have increased further; for the week ended May 17 it stood at 8.1% as against 7.82% in earlier week. It was bit higher than market estimation of 7.91%.

Gross Domestic Product (GDP) for the quarter ended March 2008 stood at 8.8% as against 9.7% in the same period of last financial year. In the same period, Farm sector growth dipped at 2.9% from 4.9%, manufacturing growth declined at 5.9% from 12.8% while construction growth jumped at 12.6% versus 12.2%. For FY08, GDP growth revised to 9% from 8.7% earlier and Farm sector growth at 4.5% versus 3.8%.

Relaxation in ECB norms also supported the markets, especially capital goods stocks, which increased foreign inflow in India. Yesterday the government increased ECB limit for core sectors to USD 100 million and doubled cap on FII investments in corporate bonds to USD 3 billion. USD 500 million cap per company under automatic route remained as it is. Government has upped cap on cost of 3-5 years ECBs to 200 bps above LIBOR and over 5 years ECBs to 350 bps above LIBOR.

The Sensex closed at 16,415.57, up 0.61% or 99.31 points after hitting an intraday high of 16,540.49 and low of 16,314.99. The Nifty has hit a high/low of 4908.85 and 4833.45, respectively, before ending the day at 4870.10, up 0.72% or 34.8 points.

Market breadth was in the favour of declines; about 1135 shares have advanced, 1805 shares declined, and 171 shares remained unchanged.

Top gainers were HDFC, Ranbaxy Labs, BHEL, Infosys, Dr Reddy's Labs and TCS while Hero Honda, Power Grid, M&M, PNB, JP Associates, Ambuja Cements and Reliance Industries losers.

ADAGs power subsidiary, Reliance Power turned ex-bonus and the price was Rs 386.16. The stock lost 38.92% or Rs 150.31 to close at Rs 235.85 from that price on the BSE.

Capital goods stocks were the star performers of the day, index jumped up by 2.52% or 323.61 points at 13,150.64 led by gain in AIA Engineering, BHEL, Punj Lloyd, L&T, ABB, Crompton Greaves, Bharat Bijlee and Areva T&D.

Technology stocks like Infosys, TCS, Tech Mahindra, Mphasis and HCL Tech remained on the buyers radar. BSE IT gained 2.11% to close at 4,643.79.

Pharma stocks including Dr Reddys Labs, Aurobindo Pharma, Ranbaxy Labs, Divis Labs, Biocon, GSK Pharma and Sun Pharma ended with sweet pills. Healthcare Index surged 1.59% at 4,395.99.

Metal Index rose by 235.18 points or 1.41% to settle at 16,914.63 as buying seen in Jindal Saw, Sesa Goa, Sterlite Ind, Jindal Steel, JSW Steel, Hindalco and Tata Steel.

FMCG Index was up marginally by 0.34% at 2,427.76 due to gains in Marico, United Spirits, Dabur India, GSK Cons, P & G and Tata Tea.

However, power stocks completely butchered; Power Index lost 3.69% or 112.60 points at 2,936.24 due to heavy selling pressure in Reliance Power, Power Grid Corp, GVK Power, Torrent Power, Reliance Infra and Tata Power.

Oil & Gas Index fell 1.65% or 174.57 points at 10,396.85 as sell off seen in Essar Oil, Reliance, HPCL, RNRL, Cairn India and BPCL.

Realty stocks like Anant Raj Ind, Ansal Properties, Unitech, Indiabulls Real, Parsvnath, Omaxe, Akruti City and DLF have collapsed. BSE Realty Index went down 1.52% or 108.29 points at 7,008.66.

Auto stocks including Hero Honda, Apollo Tyres, TVS Motor, M&M, Bharat Forge, Ashok Leyland and Tata Motors also lost the road. Auto Index tumbled by 1.25% to close at 4,355.76.

Small cap stocks like Paramount Comm, Mcleod Russel, Kalindee Rail, Force Motors, KEI Industries, Arihant Found, Guj Amb Exports, Gwalior Chem, Jayshree Tea, Prime Securities and English Ind Cla witnessed selling pressure, lost around 5-9%. BSE Small Cap Index fell 0.59% at 8,133.04.

Fertilisers stocks have lost ground after run up for last two days. Chambal Fert, Coromandel Fert, Deepak Fert, Fert and Chem, GNFC, Nagarjuna Fert, National Fert, Rashtriya Chem, Shiva Fert and Zuari Inds slipped lower.

Tea stocks like Asian Tea Expo, Assam Company, Dhunseri Tea, Goodricke Group, Harrisons Malay, Jayshree Tea, Mcleod Russel and Tata Coffee also finished weak.

Reliance Power, Reliance Industries, L&T and Infosys were most active counters on the bourses.

For the week, Sensex and Nifty plunged nearly 1.5%. CNX Midcap Index lost 3% and BSE Small-cap Index down 4.5%. Banking stocks were the worst hit, BSE Bankex fell 6.5% led by ICICI Bank and SBI, both cracked over 8.2% while BSE IT Index up 6.5% due to jumped of 11.4%, 8% and 6.8% in TCS, Satyam and Infosys, respectively. Unitech fell 13.5% while L&T and Bharti up 4.5%.

Turnover traded by the markets stood at Rs 56315.39 crore including Rs 14935.61 crore from NSE Cash segment, Rs 35883.79 crore from NSE F&O and the rest Rs 5495.99 crore from BSE cash segment.

On the global front, Asian markets ended higher barring Taiwan and Jakarta. Nikkei was up over 1.5% and Shanghai up nearly 1%. European markets were trading higher at the time of writing market report.

Markets Snapshot

• Market end with modest gain but remains volatiel through out the day
• Sensex ends up 99.3 pts at 16416; NIfty up 35 pts at 4870
• Selling pressure seen in mid-cap and small-cap stocks
• CNX Midcap Index ends flat; BSE Small-cap Index down 0.6%
• BSE Cap Goods Index up 2.5%; BHEL up 4%, L&T up 3.5%
• BSE IT Index continues to gain; ends up 2%; TCS up 4.5%, Infy up 4.1%
• BSE Pharma up 1.5%; DRL up 5.5%, Ranbaxy up 4.8%
• Index Losers; Hero Hinda down 4%, M&M down 2.5%, RIL down 2.4%, Unitech down 2%
• Reliance Power closes at Rs 234 Vs ex-bonus listing price of Rs 309
• Losers; Piramal Life down 8.3%, Dish TV down 5.4%, JP Associates down 5.3%, Chambal Fert down 3.3%, Nag Fert down 3%
• Gainers; GSS America up 19.7%, HCC up 8%, Geojit up 4.3%, Praj up 4%
• NSE Advance Decline at 1:2
• Total market turnover at Rs 56315 cr; FNO turnover at Rs 35884 cr

F&O Snapshot

• 1st day of series ends on a weak note
• Nifty Fut down marginally with fresh short build up; adds 19 lakh shares
• Nifty futures end at discount of 22 pts Vs premium of 23 point ends in yesterday trade
• Fresh shorts seen in momentum stcoks, banking stocks
• Unwidinng of long positon seen in IFCI, Ambuja Cem, Arvind mills, Power Grid
• Short covering seen in HCC, Punj Lloyd, BHEL, Power Grid, L&T, HDFC
• Nifty 4800 put adds 8.6 lakh shares; Nifty 4700 put adds 7.2 lakh shares
• Nifty 4900 call adds 11.2 lakh shares ; Nifty 5000 call adds 8.6 lakh shares
• Rel Power; traders are shorting futures to hedge their bonus shares which will come around 30 days later; hence discount of 5-6 pts

Star Trades

• Bhushan Steel up 9%; adds 24 thousand shares in OI
• Sterling biotech up 4.5%; adds 2.8 lakh sares

Long build up

• Ranbaxy up 4.4 %; adds 14.6 lakh shares
• Infosys 2.6%; adds 4 lakh shares in OI
• Polaris up 2.3%; adds 2.3 lakh shares

Short Build up

• JP Associates dn 4.5%; adds 15.2 lakh shares in OI
• IOB dn 5.5%; adds 3.7 lakh shares in OI
• Unitech dn 3.2%; adds 7.6 lakh shares in OI

Markets This Week

• Sensex, Nifty down nearly 1.5%
• CNX Midcap Index down 3%, BSE Small-cap Index down 4.5%
• BSE Bank Index down 6.5%; ICICI Bank down 8.5%, SBI down 8.2%
• BSE Auto Index down 5.6%; M&M down 10%, Tata Motors down 9.2%
• BSE Oil & Gas Index down 5.5%; Cairn India down 7%, RIL down 6.2%
• BSE IT Index up 6.5%; TCS up 11.4%, Satyam up 8%, Infy up 6.8%
• BSE Healthcare Index up 4%; Ranbaxy up 6%, Sun Pharma up 5.5%, DRL up 4%
• Unitech down 13.5%, L&T, Bharti up 4.5%
• Sita Shree Food down 22%, IOB down 15%, Dish TV down 14%
• Bajaj Hind, Shree Renuka, DCB down 13%, JP Ass, Indiabulls Fin down 10%

Asia Today

• Asian markets gain on drop in oil prices and let by exporters on weaker currencies
• Nikkei up 1.5%, Straits Times, Shanghai up 1%, Hang Seng, Kospi up 0.5%

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