The Hindu Business Line : Sensex fluctuates in a narrow band

Markets paused for a breather on Tuesday after the sharp rally seen in the previous three sessions. It was a quiet session with the Sensex fluctuating in a narrow band around Monday's closing level. It eventually closed the day with a mild 0.26 per cent loss. The Nifty ended the day on a weaker note, down 0.46 per cent.

Volumes were relatively subdued. The volume in the cash segment on NSE was Rs 9,840 crores while the derivatives segment recorded a volume of Rs 29,947 crores. The positive market breadth recorded on Tuesday points towards the continuation of the party in the midcap and smallcap stocks that began towards the end of last week. The BSE Midcap Index recorded a gain of 0.44 per cent while the BSE Smallcap Index closed almost flat with a 0.09 per cent gain.

The slide in the markets was led by telecom stocks that saw some profit booking after the sharp spike in stock prices over the last few trading sessions. Reliance Communications was the top loser in the Sensex with a 5 per cent loss. Bharti Airtel lost 1.38 per cent.

Crude oil for March delivery rose by 1.64 per cent to $59.68 on the New York Mercantile Exchange. Expectations that cold weather in US will deplete inventories pressured prices. This hike in international crude prices affected the domestic oil marketing companies. HPCL closed lower by 2.49 per cent, BPCL lost 1.31 per cent and IOC closed lower by 1.94 per cent. Airline stocks such as Air Deccan that closed lower by 4.17 per cent and SpiceJet that lost 1.25 per cent were also affected by rising fuel cost.

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International base metal prices stabilised on Tuesday after fall in the stocks in the warehouses of London Metal Exchange. The local base metal companies traded with a negative bias after the sharp sell-off seen on Monday. Hindalco closed the session with a 2 per cent loss, Nalco lost 0.34 per cent and Sterlite closed 1 per cent lower.

Sugar stocks were buoyed by the order from the Food Ministry allowing the export of 2,20,000 tonnes of sugar. Bajaj Hindustan gained 4 per cent, Balrampur Chini closed higher by 1.43 per cent and Dhampur Sugar gained 3.66 per cent.

Stock specific news

Moser Baer has announced that they have entered in to a definitive agreement to acquire OM&T B.V., a highly specialised technology company into optical research and development, which is currently a 100 per cent subsidiary of Philips. The stock was up 7 per cent, spurred by this news.

Ranbaxy Laboratories moved into the limelight when it announced that it has signed a new multi-year agreement with GlaxoSmithkline that modifies and expands the terms of their strategic alliance established in 2003 to provide the company expanded drug development responsibilities and further financial opportunities. The stock price of Ranbaxy closed the session with a 1.36 per cent gain.

Ashok Leyland announced that its vehicle sales in January rose 67 per cent to 9,650 units from 5,787 units a year earlier. Exports jumped to 554 units from 169 units. The stock spurted up in late afternoon and closed with a 1.94 per cent gain.