Mkts end higher led by short covering; shrug off rate hike

It was a smart pull back rally for the markets on strong volumes in last one hour of trade after remained volatile for major part of the day, ahead of F&O expiry day for the month of June. It was mainly because of short covering in the F&O market, which has started in yesterday's trade. It shrugged off completely the effect of RBIs move, which hiked Repo rate and CRR by 50 bps each yesterday. Rally in late trade led by oil, telecom, and select metal, IT and capital goods stocks. Midcap and small cap stocks also bounced back.

Markets had witnessed sharp sell off in opening trade due to RBI's move but managed to show sharp recovery in the first one hour of trade itself and turned into choppy mode since then. The Nifty went below 4100 mark and the Sensex below 14000 in early trade. But due to smart buying support and short covering in F&O, markets jumped up in late trade.

The Sensex has recovered nearly 488 points and the Nifty 159 points from day's low of 13,731.54 and 4093.20, respectively. The Nifty closed at 4252.65, up 61.55 points or 1.47% and the Sensex at 14,220.07, up 113.49 points or 0.8% after hitting an intraday high of 4264.55 and 14,248.65.

Main contributors in today's rally were Reliance Industries, Reliance Comm, Bharti Airtel, Tata Steel, BHEL, TCS, DLF and ONGC.

Amongst frontliners, Unitech was up 7.87%, Reliance Communication 7.30%, Tata Steel 4.43%, DLF 4.30% and Reliance Infrastructure 4.17% while HDFC lost -4.29%, Wipro -2.91%, Cipla -2.54%, Infosys -2.48% and Power Grid Corp -2.76%.

Metal Index has outperformed other indices, jumped up by 396.32 points or 2.96% to settle at 13,765.14 on the back of buying in JSW Steel, Tata Steel, SAIL, Hindalco, Jindal Steel and Sterlite Ind.

Oil & Gas Index surged by 265.13 points or 2.9% at 9,411.56 as buying has seen in Essar Oil, HPCL, Reliance Ind, Cairn India, BPCL, IOC and ONGC.

Realty stocks like Unitech, Peninsula Land, Mahindra Life, DLF, Parsvnath and HDIL have gained. Index was up by 109.41 points or 2.15% at 5,207.85.

Power stocks also charged up, which includes Reliance Infra, GMR Infra, Suzlon Energy, Reliance Power, Torrent Power and NTPC. Index moved up 1.93% at 2,444.42.

Capital Goods Index was up by 162.58 points or 1.53% at 10,802.18, led by buying in Areva T&D, Punj Lloyd, Siemens, BHEL, Bharat Bijlee and Crompton Greaves.

Telecom stocks like Reliance Comm, Bharti Airtel, Tata Comm, Idea Cellular, MTNL and Tata Teleservices also ended strong. Spice Communication jumped up by 33.12% at Rs 72.35 after the news that Idea Cellular has bought 40.8% stake in the company at Rs 77.30 per share. Spice shareholder will get 49 shares of Idea for every 100 shares held. Idea Cellular will make additional payment of Rs 544 crore as non-compete fee to BK Modi group.

Healthcare Index closed at 4,189.98, up 0.59% due to buying in Orchid Chemicals, Lupin, Ipca Labs, Divis Labs and Ranbaxy Labs.

Auto stocks like Bajaj Auto, Exide Industries, Amtek Auto, Maruti Suzuki and Bharat Forge moved up. Index was up 0.47% at 3,860.88. However, MRF, Apollo Tyres, Tata Motors and Punj Tractors lost ground.

However, IT index lost 1.12% at 4,094.95 on the back of selling in Wipro, Infosys, Patni Computer, Satyam, HCL Tech and Tech  Mahindra. However, i-Flex Solutions, Financial Tech, Aptech, TCS and Mphasis gained.

FMCG stocks also plunged, which includes P & G, ITC, Colgate, Godrej Consumer and Dabur India. Index fell 0.76% at 2,130.35.

Bankex ended flat with negative bias, was down 0.37% at 6,475.81. Selling has seen in Oriental Bank, Allahabad Bank, Karnataka Bank, Canara Bank, Kotak Mahindra, Union Bank, ICICI Bank and SBI while buying in Bank of India, HDFC Bank, Axis Bank and Bank of Baroda.

Reliance Comm, TCS, DLF, Maruti, Reliance Infra, Tata Steel, BHEL, Bharti Airtel, Unitech, Siemens, PNB, Reliance Petro, Cairn India, HDFC Bank, Reliance Ind, Hindalco, HUL, Ranbaxy, ACC and Ambuja Cements have recovered around 5-13% from day's low.

BSE Midcap Index was up 0.59% at 5,746.66 and Small Cap up by 0.74% at 7,058.02. Amongst midcap stocks, Spice Comm, Guj NRE Coke, Bombay Dyeing, Geodesic, Shree Renuka, India Infoline and JagranPrakashan went up over 6%.

In the small cap segment, Elantas Beck, Rayban Sun, Radico Khaitan, Bliss GVS, Sasken Comm, Satra Propertie, Hatsun Agro and Bajaj Auto Fin shot up over 10%.

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

Total marketwide turnover has hit Rs one lakh crore. At close, it stood at Rs 98,567.96 crore, which has been improving from last week. This includes Rs 12,318.52 crore from NSE Cash segment, Rs 81,001.29 crore from NSE F&O and the balance Rs 5,248.15 crore from BSE Cash segment. F&O turnover was highest since January 21, 2008.

On the global front, Asian markets ended higher barring Nikkei and Jakarta. Shanghai Composite was up 3.64%, Hang Seng 0.8%, Straits Times 0.83%, Kospi 0.4% and Taiwan Weighted 1.5% while Nikkei down -0.14% and Jakarta Composite -1.02%. European Markets were trading in green; FTSE 100 was up 0.3%, CAC 1% and DAX 0.4%.

Markets Snapshot

• Markets end at day's high led by short covering
• Sensex ends up 113.5 pts at 14220; recovers nearly 500 pts from day's low
• Nifty ends up 61.5 pts at 4,252.6; recovers nearly 160 pts from day's low
• Nifty slips below 4,100 during the opening trade
• CNX Midcap Index ends up 0.8%, BSE Small-cap Index up 0.7%
• BSE Metal, Oil & Gas Indices up nearly 3%, BSE Realty Index up 2.15%
• Deal of the day: Idea to acquire 40.8% stake in Spice Comm at Rs 77.3/sh
• Telecom Buzzers; Spice Comm up 33%, R Comm up 7.3%, Bharti up 3.9%, Tata Comm up 4.1%
• Realty Buzzers; Unitech up 7.9%, DLF up 4.3%
• Index Gainers; Tata Steel up 4.4%, Reliance Infra up 4.1%, RIL up 3.5%, TCS up 3.8%
• Stocks under pressure; Indiabulls Real down 7.4%, Panacea Biotec down 7.5%, OCL India down 8%
• NSE Advance Decline at 7:5
• Total F&O turnover at Rs 81,000 cr; highest since Jan 21, 2008
• Total market turnover at Rs 98568 cr Vs Rs 87406 cr cr on Tuesday
• F&O turnover at Rs 81000 cr Vs Rs 70250 cr on Tuesday
• Buzzers
  -LG Bros up 20%; Renold to acquire Industrial Chain Biz Of~LG Balakrishnan For 5.7 m Pounds
  -Niraj Cem up 20%; Recent listing
  -GHCL up 10%; Dow Chem to increase prices by another 25% in July
  -Spice up 17.2%; market believes that Spice group will pump more money in Spice Mobile
  -Sasken Comm, HOEC, BOI, Punj Lloyd, Shree Renuka, Rel Cap

F&O Snapshot

• Nifty rollover at 53%, Market wide at 53%
• Short covering seen in the Nifty futures
• Nifty June at 8 pts discount Vs 19 pts disc in the morning
• July futures at 42 pts disc Vs 50.7 pts disc in the morning
• Cement and construction continued to witness strong rollovers
• Options:
  Nifty 4200 July call adds 12.9 lakh shares
  Nifty 4300 July call adds 10.3 lakh shares
  Nifty 4000 July put adds 6.8 lakh shares
• Star Trade:
  Sasken up 14%; adds 2.4 lakh shares in July
• Fresh Longs:
  Hind Oil up 9%; adds 12 lakh shares in July
  Century Text up 9.3%; adds 5.5 lakh shares in July
  Bombay Deying up 8.4%; adds 2.1 lakh shares in July
  Essar Oil up 4.3%; adds 8.6 lakh shares in July
  Reliance Ind up 3.5%; adds 16.7 lakhs shares in July
  Tata Steel up 3.8%; adds 21.9 lakh shares in July
  RPL up 4.5%; adds 1.1 cr shares in July
  SAIL up 3.2%; adds 55 lakh shares in July
• Short Covering:
  Bank of India up 8.5%; sheds 1.7 lakh shares in July
• Fresh Short :
  Oriental Bank dn 6%; adds 3.3 lakh shares in July
  Yes Bank dn 4.5%; adds 6.6 lakh shares in July

Contd on page 2...