Sensex Edges Lower on Late Sell-Off

Ivaylo
10 May, 2007
New York City

The benchmark index opened with a positive bias on follow-up buying and firm global markets and traded higher in early deals. Aggressive selling, mostly in oil & gas stocks sent the index sharply lower in late afternoon trading. ONGC, NTPC, Ranbaxy, Reliance Industries and Reliance Energy were severely hit, while cement stocks Grasim and ACC rallied. Car sales in India rose 11.3% on year in April.

[R]8:00AM NY-7:00PM Mumbai Sensex ends lower on late sell-off in large-caps.[/R]

The Sensex on BSE finished 10.28 points, or 0.07%, lower at 13,771.23.

The market-breadth ended slightly negative as 1,238 stocks advanced, while 1,328 stocks declined and 68 stocks remained unchanged. Of the 30 stocks in the Sensex, 14 advanced, while the rest declined. The turnover on NSE was Rs 9,225.37 crore, compared with Rs 8,394.44 crore on Wednesday.

Economic news

Assembly poll results in Uttar Pradesh are due tomorrow, May 11 2007. Polling for the seventh and final phase got over on Tuesday, May 8 2007. The UP vote is seen as a barometer of national political trends and had some influence on trading today.

Passenger car sales in the domestic market during April increased 11.26% while motorcycle sales were down, reporting a decline of 9.68%. According to figures posted by the Society of Indian Automobile Manufacturers, domestic passenger car sales during April stood at 82,934 units compared to 74,542 units in the same period last year. Motorcycle sales during the month, however, stood at 4,63,091 units as against 5,12,695 units in April 2006.

Telecom regulator TRAI today recommended decreasing of foreign direct investment on par with telecom sector at 74% from the existing 100%. TRAI has also proposed major changes in financial and regulatory levies. Instead of free entry, it suggested levying an entry fee of up to Rs 20 lakh along with a uniform license fee of 6% of gross revenue.

Trading highlights

Indiabulls Real Estate was the most-active stocks with a turnover of Rs 190 crore followed by Page Industries and Tata Steel.

Advancers

HDFC led the gainers today, soaring 5.3% to Rs 1,680. Tata Steel surged 2.5% to Rs 576. The company was down from the session high of Rs 584.70. Tata Steel is to report strong numbers when it unveils its fiscal 2007 results on May 17 2007 on higher steel prices.

HDFC Bank and ITC rallied 1.7% each to Rs 1,014 and Rs 163, respectively. Bajaj Auto and Hindalco gained around 1.5% each to Rs 2,604 and Rs 146, respectively. Hero Honda also finished 0.5% higher at Rs 705.

Decliners

Oil exploration large-cap ONGC led decliners, losing 2.2% to Rs 889, in contrast to an early 2.2% increase in the stock to Rs 929.70 that was sparked by reports the government had decided to cut the subsidy share of upstream companies by nearly Rs 5000 crore.

NTPC slipped over 2% to Rs 151 and Ranbaxy dropped 1.8% to Rs 386. Tata Motors and Larsen & Toubro declined around 1% each at Rs 714 and Rs 1,691, respectively. Index heavy Reliance Industries was down around 1% at Rs 1,581.

Car maker Maruti Udyog declined 1% to Rs 795. The stock had advanced 1.1% to Rs 835 in early trade. The Group of Ministers will probably finish today the selling of the government 10.27% stake in the car maker. The stake is to be sold to banks, mutual funds, and financial institutions.

[R]6:30AM European markets were little changed Thursday ahead of important rate decisions.[/R]

The U.K. FTSE 100 index edged down 0.1% at 6,545.80, the German DAX Xetra 30 index was up 0.1% at 7,483.90 and the French CAC-40 index traded 0.1% lower at 6,045.08. National benchmarks decreased in all of the 17 western European markets that were open except Denmark, Greece and Luxembourg.

Economic news

The Bank of England is expected to hike rates by a quarter point to 5.5% in an attempt to curb inflation, while the European Central Bank is expected to keep rates on hold at 3.75% while at the same time hinting at a June rate increase.

Tony Blair will step down as prime minister of the United Kingdom on June 27, after a decade in office. He will leave office as soon as a new leader is elected for the Labour Party, the most likely candidate being Gordon Brown, current finance minister.

Advancers

Hammerson shares rallied 8.6% after reports that New York-based buyout firm Kohlberg Kravis Roberts & Co. and Vornado Realty Trust may bid for the U.K. owner of malls and offices.

Premiere shares advanced 2.6% after it reversed to a profit of 4.5 million euros in the first quarter of the year. Last year, it posted a loss of 18.3 million euros.

BMW climbed 2.6% after Goldman, Sachs & Co. added the shares of the world biggest luxury carmaker to its conviction buy list and lifted its price estimate.

Decliners

French bank Societe Generale plunged 2.5% after its first-quarter profit dropped 2% to 1.43 billion euros on a decline in retail and corporate and investment banking performance, a drop in equity portfolio income and the negative impact from marking-to-market interest rate swaps.

Rio Tinto, mining company, lost 2.4%. BHP Billiton, the world biggest mining company, declined 2.6%. E.ON dropped 1.1% and RWE declined 1.3 %.

Commodities

Crude oil was little changed on concern that supplies will be further disrupted in Nigeria. Crude oil for June delivery slipped to $61.45 a barrel in after-hours trading on the New York Mercantile Exchange. Brent crude oil for June settlement gained 42 cents, or 0.6%, to $65.62 a barrel in electronic trading on the ICE Futures exchange.

Gold and silver were virtually unchanged as the reopening of Newmont Mining Corp. Yanacocha gold mine in Peru reduced concern over supply. Gold for immediate delivery fell $1.10, or 0.2%, to $679.45 an ounce and silver for immediate delivery declined as much as 2 cents, or 0.2%, to $13.34 an ounce.

Currencies

The euro advanced slightly against the U.S. dollar on Thursday ahead of a meeting by the European Central Bank that is expected to see interest rates left unchanged at 3.75%. The euro bought $1.3541 in morning European trading, compared with the $1.3529 it bought in New York late Wednesday. The British pound slipped to $1.9904 from $1.9941 and traded at $1.9962 during Thursday session. The dollar rose to 120.27 Japanese yen from 120.02 yen the night before.

[R]5:00AM Cocoa advances Wednesday, while gold and silver decline.[/R]
On the New York Board of Trade, the most-active July cocoa surged $39 to settle at $1,929 a metric ton. July Arabica coffee futures advanced 1 cent at $1.0625 a pound. Futures on raw sugar in foreign ports for July ended 0.09 cent higher at 9.31 cents a pound.

June gold declined $4.90 at $682.50 a troy ounce on the New York Mercantile Exchange. July silver declined 13 cents at $13.47. July platinum dipped $3.70 to end at $1,339.50 an ounce, while June palladium lost $5.55 to finish at $370.40 an ounce. The most-active July copper contract lost 4.35 cents to settle at $3.6790 per pound.

The June crude oil contract declined 71 cents to close at $61.55 a barrel after trading as low as $60.68, the lowest intraday price for a front-month contract since March 22. June gasoline advanced 2.64 cents to $2.2309 a gallon, while June heating oil settled down 1.41 cents to $1.8158 a gallon. June natural gas added 8.3 cents to end at $7.720 per million British thermal units.

May corn ended 3.50 cents higher at $3.5725 per bushel, July gained 2.75 cents $3.6625, and December slipped 0.50 cent to $3.66. July soybeans finished up 8 cents at $7.4750 per bushel, and November soybeans rose 8.50 cents to $7.7725. July wheat advanced 1 cent to $4.82 per bushel.