Market volatile after inflation data

The key benchmark indices were volatile after inflation data which hit the market in early afternoon trade. Banking, IT stocks rose while realty and metal stocks fell. Asian markets were trading mixed. The market breadth was strong due to buying in select mid-cap and small-cap stocks.

Inflation based on the the wholesale price index rose 8.75% in the 12 months to 31 May 2008, above the previous week's annual rise of 8.24%, government data released today, 13 June 2008, afternoon showed. The reading is highest since 10 February 2001, when it was 8.77%.

At 12:20 IST, the 30-share BSE Sensex was down 61.45 points or 0.4% at 15,190.14. At the day’s low of 15,149.98, Sensex lost 100.20 points in mid-morning trade. At the day’s high of 15,337.10 Sensex gained 86.9 points in early trade.

The broader based S&P CNX Nifty was down 33.35 points or 0.73% at 4,506.

The market breadth was positive on BSE with 1,264 shares advancing as compared to 1,026 that declined. 73 remained unchanged. Among the 30 stocks from Sensex pack, 20 were trading in red.

The BSE Mid-Cap index rose 0.03% to 6,225.55 and BSE Small-Cap index up 0.59% to 7,570.26. Both these indices outperformed Sensex.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries declined 0.3% to Rs 2,275.

Bank stocks shrugged off higher inflation data announced today. India’s largest commercial bank State Bank of India rose 0.32% to Rs 1,344. The asset-liability committee of State Bank of India (SBI), will be reviewing interest rates today following the latest RBI move to raise repo rate.

The Reserve Bank of India on Wednesday, 11 June 2008, hiked repo rate by 25 basis points to 8% with immediate effect in an effort to contain rising inflation.

India’s largest private sector bank by net profit ICICI Bank rose 2.13% to Rs 758.10. India’s second largest private sector bank by net profit HDFC Bank declined 2.15% to Rs 1,139.

India’s largest dedicated housing finance firm by operating income HDFC declined 1.1% to Rs 2,147.90. HDFC chairman Deepak Parekh said on Thursday, 12 June 2008, HDFC will take a decision on raising interest rates on home loans by end of this month. He said there was upward pressure on interest rates.

IT stocks rose. Tata Consultancy Services (up 2.43% to Rs 911), Infosys (up 0.66% to Rs 1,890) and Satyam Computer Services (up 0.32% to Rs 485.85) edged higher.

India’s third largest IT exporter by sales Wipro declined 1.36% to Rs 476.55. It is reportedly bidding for 12 contracts worth at least $100 million each as it seeks bigger clients.

Metal stocks declined. Steel Authority of India (down 2.98% to Rs 157.95), Sterlite Industries (down 2.21% to Rs 778), National Aluminium Company (down 2.35% to Rs 469), Hindalco Industries (down 0.93% to Rs 176) and Tata Steel (down 0.62% to Rs 851.80) edged lower.

Realty stocks which had seen some buying in last two days fell today. Indiabulls Real Estate (down 4.48% to Rs 377.30), DLF (down 1.95% to Rs 488) and Unitech (down 1.98% to Rs 185.40) edged lower.

India’s biggest drugmaker by sales Ranbaxy Laboratories rose 4.32% to Rs 566.50. Drug maker Pfizer Inc may reportedly make a hostile bid for the 65% stake in Ranbaxy not held by its founders. Daiichi Sankyo Co., Japan's third-largest drug maker, had agreed on 11 June 2008 to buy a controlling stake in Ranbaxy for as much as $4.6 billion. Pfizer's Indian arm surged 5.99% to Rs 627.30.

Ambuja Cements (up 0.81% to Rs 86.65), Bharat Heavy Electricals (up 0.54% to Rs 1,527.95), and ACC (up 0.47% to Rs 635.25) edged higher from Sensex pack.

Hindustan Unilever (down 2.34% to Rs 227), Maruti Suzuki India (down 2.29% to Rs 719.50), NTPC (down 1.84% to Rs 160.20), Cipla (down 2.05% to Rs 212.55), ITC (down 1.75% to Rs 196), Reliance Infrastrucutre (down 1.77% to Rs 1,029), and Jaiprakash Associates (down 1.91% to Rs 182.65) edged lower from Sensex pack.

India’ largest engineering and construction firm by sales Larsen & Toubro was down 0.09% to Rs 2,704. Due to unfavourable market condition, L&T has reportedly decided to delay the listing of its software business unit L&T Infotech to 2009-10. The firm had earlier decided to go for L&T Infotech's initial public offer in the second half of this fiscal.

PSL rose 2.53% to Rs 349.95 after it won a contract worth Rs 123 crore from BPCL.