Volatile Sensex in India Closes Lower

Elena
07 Apr, 2006
Mumbai

Market average gyrated for the most of the day under the fear of rumors and pull back from institutional investors. After rising 8% in less than ten trading days the pull back in averages was anticipated. Daily trading volume jumped to $1.2 billion from $0.9 billion. ACC rose close to 5% on earnings report next week as market awaits fiscal 2006 earnings.

[R]8:45 AM Volatile Sensex Index in India close lower.[/R]
Sensex Index in Mumbai, India lost 157 points or 1.3% to close at 11,589. The index is expected to cool after rising more than 8% in less than ten trading days. Sensex remained volatile for the day as market was influenced by unsubstantiated rumors. Market lost close to 1.7% by mid-morning on rumor that several institutions which including international investors have been barred from purchasing shares. Market regained most of the losses by mid-afternoon but lost 157 points in the last half hour trading. For the day Sensex oscillated for 366 points or 3%.

Large caps mostly traded down, up and then down again. Autos, infrastructure, cement and pharma stocks declined at close. IT companies lost for the day led by a decline in Satyam Computer. Infosys rose 1% to Rs. 3,156 as the company board meets to discuss stock bonus issue on April 14th. ACC, Cement maker, rose 4.5% to Rs. 876 and traded lower from the day’s high of Rs. 918, after company denied rumors of stock split. ACC is to lead release of earnings season for the year fiscal 2006 on April 12th. Market has discounted good earnings season for the fiscal 2006 and 2007 and market may come under heavy selling if companies fail to meet the expectations. Jet Airways rose 4% to Rs. 1,023 on large block trading of 170,000 shares. Aditya Birla Nuvo rose 6% to Rs. 610 and Indo Gulf rose 9% on the news that the merger between the two companies have been approved and schedule to complete by September 1st, 2006. Gujarat Ambuja Export rose 20% on the news that Reliance Capital Mutual Fund has bought 5 million shares. The company split 5 to 1 stock earlier in the year on robust earnings and revenue growth.


[R] 8:15 AM European averages traded flat at mid-day.[/R]
European markets traded in a tight range at mid-day, reflecting cautiousness ahead of U.S. jobs report and news that BAE Systems is selling its stake in Airbus. Aerospace company BAE Systems dropped 1.9% after it announced it is in talks to sell its 20% shareholding in plane maker Airbus to European aerospace giant EADS. The German DAX 30 inched up 0.01%, the French CAC 40 edged down 0.01%, while London FTSE 100 gained 0.3%.


[R]7:45AM Asia advanced. The Nikkei and Hang Seng hit 51/2-year highs.[/R]
Asian-Pacific benchmarks finished largely in the positive, with tech stocks tracing U.S. gains to provide a boost to the market sentiment. The Nikkei reversed from early losses to close the session up 0.4% at 17,563.37, the highest level in nearly six years. The index, which has recently been strong on fresh fund investments into blue-chip, auto and banking stocks, was supported by gains for blue-chip and tech companies. Among the leading gainers, major game maker Nintendo rose 2.8%, Kyocera was up 3.5% and Toshiba jumped higher by 2.3%. Across the region, Hong Kong''s Hang Seng advanced for a fourth consecutive session, rising 0.4% to a 51/2-year high on flows of speculative funds. Shares of China Mobile rose 1.6%. Taiwan Weighted index climbed 0.3% on strong semiconductor and tourist companies.