Stock markets settle with marginal gains

Mumbai, June 1: After starting the day on an highly bullish note above the 14,600 mark, the Sensex finally settled with a marginal gain of just 26.29 points today on the Bombay Stock Exchange (BSE) at 14,570.75, as sustained selling since noon on profit taking at higher levels capped gains.

After opening higher at 14,610.28, it reached an intra-day high of 14,682.10 and a low of 14,539.89.

Among the broader markets, the Nifty Index also managed a nominal gain of around 2 points on the National Stock Exchange (NSE) at 4,297.05 from its previous close of 4,295.80, after touching an intra-day high of 4,325.80 and a low of 4,288.55.

''It was a day of high volatility. A smooth rollover of positions in the derivatives market and fresh build-up of new positions on first day after expiry, firm Asian markets and robust set of economic growth rates triggered a rally in first half of the day, taking it to its highest level in nearly four months since Feb 9, this year. However, on account of sustained selling since noon ultimately capped gains,'' market analysts explained.

Official data revealed that the marketwide rollover in the derivatives market was 82.8 per cent yesterday which is slightly higher than 82.5 per cent during the April expiry. Nifty Futures rollover was 75 per cent as compared to 71.7 per cent in the previous expiry. Higher rollover of positions indicates a bullish trend, experts noted.

The total turnover on the premier BSE was Rs 4,669 crore. The breadth was positive here as 1,377 shares advanced and 1,218 declined, while 94 remained unchanged. It is worth mentioning here that in the opening session, however, 1,141 shares had advanced as compared to 436 that had declined. Among the 30-member Sensex pack, 17 advanced while the rest declined.

''Foreign Institutional Investors (FIIs) were net buyers of approximately Rs 168.86-crore equities, while domestic institutional investors (DIIs) bought a net Rs 32.19-crore equities yesterday,'' traders disclosed.

Pharma major Cipla advanced 2.92 per cent to Rs 224 on 10.88 lakh shares. It was the top gainer. Shares from banking sector advanced despite market rumours of hike in cash reserve ratio (CRR), due to easy liquidity in the money market. ICICI Bank was up 1 per cent to Rs 928, SBI by 1.67 per cent to Rs 1375 and HDFC Bank rose by 1.65 per cent to Rs 1158.50.

Experts expect a CRR hike of 25-50 basis points (100 basis points make 1 per cent) from RBI to suck out liquidity this month, when the equity market will see big issues (DLF and ICICI Bank) and high foreign inflows are expected. They are of the opinion that the RBI may continue to tighten its fists on the monetary side, after the government announced sparkling gross domestic product (GDP) growth of 9.4 per cent in the year ended March 2007.

Information Technology (IT) pivotals posted gains for the second straight day today on renewed buying despite rupee inching towards its recent high today. IT had had remained weak over the last few weeks. Satyam Computers was up 1.15 per cent to Rs 475, TCS rose by 0.89 per cent to Rs 1219.35 and Infosys was up by 0.87 per cent to Rs 1937.

Analysts explained that the IT stocks have not performed in the market's recent surge due to an appreciating Rupee. A rise in the rupee directly impacts revenue and profit of IT firms, which derive a lion's share of revenue from exports to the US.

The Rupee inched towards a recent a nine-year high today, as traders anticipated a burst of capital inflows into local equities, but was blocked again by state-run banks which resorted to buying dollars.

Engineering major Bharat Heavy Electricals advanced 0.86 per cent to Rs 1,411, while Index heavyweight Reliance Industries (RIL) was down by 0.76 per cent at Rs 1,746.85 on 4.55 lakh shares.

Auto stocks were under selling pressure. A rise in crude oil prices, coupled with margin pressure concerns, pulled these stocks lower. Hero Honda declined 2.63 per cent to Rs 713.10, on 1.14 lakh shares and was the top loser. Tata Motors and Maruti Udyog also edged lower.

The other losers included ITC, Bharti Airtel, and HLL.

All the European markets, except Italy's MIBTel, down by 0.01 per cent, were trading with gains. On the other hand, most of Asian markets advanced. The Nikkei average rose 0.47 per cent to close at its highest in three months as trading firms rose on Morgan Stanley's higher target prices and retail investors bought steel and other value stocks. The Nikkei added 83.13 points to 17,958.88, the highest close since February 27, this year.

The Hang Seng index was down 0.15 per cent or 31.60 points to 20,602.87.

Among US stocks, the Dow Jones industrial average slipped 5.44 points, or 0.04 per cent, to 13,627.64, after reaching a new all time high of 13,673.07. However, the broader stock indices managed gains. The Standard&Poor's 500 index advanced 0.39 point, or 0.03 per cent, to 1,530.62. The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93 points, or 0.46 per cent, to 2,604.52.

Crude oil prices rose today after a US government weekly fuel supply report showed an unexpected decline in crude oil stockpiles.

Light, sweet crude for July 2007 delivery added 17 cents to USD 64.18 a barrel in Asian electronic trading on the New York Mercantile Exchange, mid-morning in Singapore.

Sterling performances by services and manufacturing sectors helped Indian economy grow by 9.4 per cent in 2006-07, the fastest rate in 18 years. The growth even exceeded the government's projection of 9.2 per cent and is next only to 10.5 per cent gross domestic product (GDP) expansion achieved in 1988-89. The figures were impressive also from the point of view that it is on the high base of 9 per cent growth in 2005-06.

UNI