Sensex opens high at 14,219.38 pts

Mumbai, Jan 31: The BSE Sensex today opened firm at 14,219.38 points with a modest gain of around eight points from its last close of 14,211.96 on expectation of liberalised third quarterly monetary policy review by the Reserve Bank of India (RBI), brokers said.

The Bombay Stock Exchange(BSE) Sensitive Index(Sensex), which had opened firm, slipped into the red. The market turned cautious ahead of the Reserve Bank of India (RBI)'s quarterly monetary policy review meeting today. The central bank may announce the outcome of its meeting this noon.

Market men expect a hike of 25 basis points in short-term interest rates. A hike to that extent has already been factored into by the market.

Later, the Sensex was down 43.78 points, at 14168.18. It had opened higher, at 14,219.38, and surged to a high of 14,269.31. The benchmark index started slipping, to touch a low of 14,153.18 during the mid-morning session.

Tata Steel was the top loser, down 7.5 per cent to Rs 480, on high volumes of 13.78 lakh shares, after the final offer of USD 511.3 billion it made for Corus is said to be expensive. Tata Steel has agreed to offer Corus' investors 608 pence per share in cash, topping a final bid of 603 pence from Brazilian Companhia Siderurgica Nacional (CSN). Both offers were at the top end of analysts' expectations.

The 608 pence per share that Tata Steel will pay values Corus at around seven times its forecast of earnings before interest, tax, depreciation and amortisation (EBITDA) for 2006, well above the multiple Mittal Steel paid for Arcelor. Mittal Steel had paid 4.6 times the latter's historic EBITDA.

Tata Steel had reported 41.1 per cent growth in net profit in the December 2006 quarter to Rs 1,063.75 crore, on 21.4 per cent growth in net sales to Rs 4,469.98 crore. Both the bottom line and top line growth were as per market expectations.

Hindalco (down 2.80 per cent to Rs 175.65), ITC (down 1.39 per cent to Rs 170) and Cipla (down 1.51 per cent to Rs 244.55) were the other losers.

Reliance Energy was the top gainer, up 1.50 per cent to Rs 513.50, on a volume of 75,365 shares.

NTPC (up 0.49 per cent to Rs 143.50) and HDFC Bank (up 0.60 per cent to Rs 1065) were the other top gainers.

ONGC rose marginally by 0.03 per cent to Rs 915. It reported a stronger-than-expected 20 per cent growth in net profit in the December 2006 quarter at Rs 4,668.31 crore (Rs 3,887.76 crore). The strong growth was mainly due to a fall in the subsidy sharing burden.

Index heavyweight Reliance Industries (RIL) was down 0.66 per cent to Rs 1,372.70. As many as 5.06 lakh shares changed hands in the RIL counter.

Trent advanced 1.30 per cent to Rs 915, after it reported 67 per cent surge in net profit in the December 2006 quarter to Rs 10.71 crore (Rs 6.42 crore). Net sales went up to Rs 121.82 crore during the period from Rs 95.16 crore in the year ago period.

The Dow Jones industrial average rose 32.53 points, or 0.26 per cent, to end at 12,523.31. The Standard&Poor's 500 Index added 8.20 points, or 0.58 per cent, to finish at 1,428.82.

The NASDAQ Composite Index gained 7.55 points, or 0.31 per cent, to close at 2,448.64.

Oil notched up its biggest gain in 16 months on Tuesday, as funds poured fresh cash into the market because of cold US weather and OPEC supply cuts. US crude was trading at USD 56.71 a barrel early on Wednesday, brokers added.

UNI