The market extended losses in mid-morning trade after experiencing a bout of volatility in early trade. Sentiment is likely to stay nervous ahead of the crucial decision on oil price hike later in the day. Asian markets were mixed.

Public sector oil & gas stocks climbed while auto stocks declined on possible fuel price rise. It stocks declined as rupee gained strength. The market breadth turned weak after positive start.

At 11:21 IST, the 30-share BSE Sensex was down 134.86 points or 0.85% at 15825.58. Sensex gained 30.34 points at its high of 15992.90 touched during early trade. It lost 155.24 points at day's low of 15,807.32, touched in mid-afternoon trade.

The broader based S&P; CNX Nifty was down 44.25 points or 0.94% at 4,671.65.

The market breadth turned weak on BSE with 976 shares advancing as compared to 1180 that declined. 70 remained unchanged.

Among the 30-member Sensex pack, 23 declined while the rest gained.

The BSE Mid-Cap index down 0.24% to 6531.60 and BSE Small-Cap index rose 0.08% to 7,888.97. Both these indices outperformed Sensex.

Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) was down 1.47% to Rs 2372.50.

State run oil & gas stocks rose ahead of the crucial decision on oil price hike later in the day. BPCL (up 3.24% to Rs 363), Indian Oil Corporation (up 2.57% to Rs 445.45), HPCL (up 2.25% to Rs 254.20) and ONGC (up 1.75% to Rs 857) edged higher.

Reports suggest that the government is likely to announce a hike in fuel prices today to bail out the bleeding oil marketing companies (OMCs) that are suffering massive financial losses due to skyrocketing international crude prices.

However, the government has been in a fix on the issue and has failed to take any decision fearing opposition from the public as well as the Left parties which are offering outside support. The Left parties have warned of a nationwide protest against any move to raise the prices of fuel. They have instead argued in favour of restructuring the tax on petrol and diesel.

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 ahead of crucial decision on oil price hike. Maruti Suzuki India (down 3.37% to Rs 760), Hero Honda Motors (down 1.03% to Rs 789.80), Mahindra & Mahindra (down 1.15% to Rs 584.20), Tata Motors (down 2.65% to Rs 555.60) and Bajaj Auto (down 0.84% to Rs 575.25) edged lower.

IT stocks declined. Infosys (down 1.12% to Rs 1,901), Tata Consultancy Services (down 2.23% to Rs 957), Satyam Computer Services (down 1.88% to Rs 490.35) and Wipro (down 1.87% to Rs 494.30) edged lower.

Reliance Communications (up 0.46% to Rs 555.30), Hindalco industries (up 0.11% to Rs 184.50), NTPC (up 0.28% to Rs 160.50), ICICI Bank (up 0.25% to Rs 761.80) and Tata Steel (up 0.25% to Rs 863.10) edged higher from Sensex pack.

However Ambuja Cements (down 3.3% to Rs 89.50), BHEL (down 2.49% to Rs 1510.90), DLF (down 2.29% to Rs 569.10), HDFC Bank (down 2% to Rs 1256.90), Hindustan Unilever (down 0.85% to Rs 232.70) edged lower from Sensex pack.

Construction and engineering firm Punj Lloyd rose 2.01% to Rs 286.50. It said on Tuesday it had acquired a 74% stake in UK firm Technodyne International for an undisclosed sum. Technodyne is a specialist engineering, design and consultancy firm with expertise in steel and steel-plus-concrete tanks and test rigs.

Spice Communications declined 4.37% to Rs 54.75. It is considering a stake sale in the company and awaiting a proposal from the Malaysian company Telekom Malaysia, which now holds 39.2% in the telecom service provider.

Apparel maker Bombay Rayon Fashions declined 2.29% to Rs 346. It said on Tuesday, 3 June 2008, it is setting up manufacturing units in integrated textile parks at Islampur and Latur in Maharashtra. The projects are entitled to a subsidy of 40% of the total infrastructure cost to set up the units, the company said in a statement to the BSE.

Engineers India declined 1.65% to Rs 590. It reported 33.3% growth in net profit to Rs 56.68 crore on 37.51% growth in total income to 287.77 crore in Q4 March 2008 over Q4 March 2007.

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 rose between 0.18% to 1.36%.

However, China's Shanghai Composite (down 2.57% at 3,348.18) and Hang Seng (down 0.24% at 24,316.86) 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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