Market witnessed a short lived recovery in in early afternoon trade in choppy trade. The Cabinet Committee on Political Affairs (CCPA) today gave its approval to the long awaited hike in fuel prices. Negative global cues dampened early start.

Government agreed to raise its petrol and diesel prices by about 10% today, more than expected, curbing losses at its state-owned refiners but stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms.

Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.

At 11:21 IST, the 30-share BSE Sensex was down 113.91 points or 0.71% at 15849.61. Sensex gained 30.34 points at its high of 15992.90 hit in early trade. It lost 187.47 points at day's low of 15,775.09, touched in mid-afternoon trade.

The broader based S&P; CNX Nifty was down 13.2 points or 0.28% at 4,702.70.

The BSE Mid-Cap index rose 0.04% to 6549.60 and BSE Small-Cap index rose 0.19% to 7,897.39. Both these indices outperformed Sensex.

The market breadth was negative on BSE with 1152 shares advancing as compared to 1214 that declined. 79 remained unchanged.

Among the 30-member Sensex pack, 19 declined while the rest gained.

Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) was flat at Rs 2406.50. It recovered from day's low of Rs 2365.05.

State run oil & gas stocks extended gains after fuel price hike. BPCL (up 4.72% to Rs 368.50), Indian Oil Corporation (up 3.16% to Rs 448), HPCL (up 3.9% to Rs 258.30) and ONGC (up 1.86% to Rs 858) edged higher.

The OMCs have so far reported losses of over Rs 2.25-lakh crore due to the high crude prices and in the absence of revision in the domestic retail prices. They have said they will run out of cash to import crude if the government fails to bail them out.

Auto stocks were subdued post oil price hike announcement. Maruti Suzuki India (down 3.37% to Rs 760), Hero Honda Motors (down 1.25% to Rs 788), Mahindra & Mahindra (down 0.83% to Rs 586), Tata Motors (down 3.03% to Rs 553) and Bajaj Auto (down 1.22% to Rs 573) edged lower.

Metal stocks were mixed with shares of non-ferrous metal declining. Sterlite Industries (down 4.15% to Rs 864.50), Sesa Goa (down 6.94% to Rs 3643), National Aluminium Company (down 2.59% to Rs 474), Hindalco Industries (down 0.54% to Rs 183.35) edged lower.

However steel stocks gained. Steel Authority of India (up 0.51% to Rs 157.25), Tata Steel (up 0.81% to Rs 868.70) edged higher.

IT pivotals declined as Indian rupee gained strength against the US dollar. Infosys (down 1.47% to Rs 1,894.95), Tata Consultancy Services (down 0.7% to Rs 971.95), Satyam Computer Services (down 2.13% to Rs 489.10) and Wipro (down 0.38% to Rs 501.80) edged lower.

NTPC (up 1.59% to Rs 162.55), Cipla (up 1.26% to Rs 213), Reliance Communications (up 0.79% to Rs 557.15), Bharti Airtel (up 0.43% to Rs 845), ICICI Bank (up 0.56% to Rs 764.15) and ACC (up 0.31% to Rs 651) edged higher from Sensex pack.

However Ambuja Cements (down 2.49% to Rs 90.25), BHEL (down 2.27% to Rs 1513.90), DLF (down 1.45% to Rs 574), HDFC Bank (down 1.25% to Rs 1266.55), Larsen & Toubro (down 1.02% to Rs 2,823.50) edged lower from Sensex pack.

Asian markets were trading mixed today, 4 June 2008. Nikkei 225 index Taiwan's Taiwan Weighted, Singapore's Straits Times, South Korea's Seoul Composite and Hang Seng rose between 0.28% to 1.59%.

However, China's Shanghai Composite (down 2.21% at 3,360.35) slipped.

US markets declined in volatile session yesterday, 3 June 2008 led by growing speculation that Lehman Brothers will be forced to raise more capital and a drop in oil prices pushed down energy companies. The Dow Jones industrial average declined 100.97 points, or 0.81%, to 12,402.85. The S&P; 500 index slipped 8.02 points, or 0.58%, to 1,377.65, while the Nasdaq Composite index was down 11.05 points, or 0.44%, to 2,480.48.

US light crude for July delivery fell 34 cents to $123.97 a barrel today, 4 June 2008, triggered by a rallying dollar as traders awaited U.S. data expected to show rising oil stocks. London Brent crude for July delivery fell 38 cents to $124.20 a barrel.

Back home, the market staged a smart intra-day rebound in second half of the days trading session yesterday, 3 June 2008, led by recovery in Reliance Industries (RIL). Panic selling in early trade by wary investors kept market depressed in the first half. The 30-share BSE Sensex settled 100.62 points or 0.63% lower at 15,962.56 and the broader based S&P; CNX Nifty fell 23.70 points or 0.5% at 4,715.90, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 1020.70 crore yesterday, 3 June 2008. Domestic funds bought shares worth a net Rs 262.49 crore on that day.

Foreign institutional investors (FIIs) were net sellers of Rs 858.65 crore in the futures & options segment yesterday, 3 June 2008. They were net sellers of index futures to the tune of Rs 1394.78 crore and bought index options worth Rs 548.79 crore. They were net sellers of stock futures to the tune of Rs 96.59 crore and bought stock options worth Rs 83.93 crore.

Meanwhile, mutual funds have reportedly managed to increase their assets under management (AUM) by 5.36% in May 2008, helped by fresh investments in fixed income funds. The collective AUM rose by 30,576.72 crore in May 2008, according to the data released by the Associations of Mutual Fund in India (AMFI).

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