The market stabilised in early afternoon trade after early wild swings either ways. It saw a firm start despite weak global cues, but slipped in red shortly on fresh selling, only to rebound from that level again. The market breadth was weak. Shares from banking, auto, realty declined while those from IT rose.

At 11:26 IST, the 30-share BSE Sensex was up 26.76 points or 0.19% at 15,543.56. Sensex gained 106.73 points at its high of 15621.52 touched during early trade. It lost 69.57 points at day's low of 15,445.22, touched in mid-morning trade.

The broader based S&P; CNX Nifty was rose 29.7 points or 0.65% at 4,615.30.

The market breadth was weak on BSE with 959 shares advancing as compared to 1453 that declined. 68 remained unchanged.

The BSE Mid-Cap index fell 0.61% to 6358.13 and BSE Small-Cap index declined 0.21% to 7,703.98. Both these indices underperformed the Sensex.

Among the 30-member Sensex pack, 17 advanced while the rest gained.

Auto stocks extended yesterdays losses dampened by fuel price hike. Tata Motors (down 2.49% to Rs 529), Bajaj Auto (down 0.30% to Rs 551.45) and Hero Honda Motors (down 0.42% to Rs 773.50) edged lower.

Indias largest maker of utility vehicles, Mahindra and Mahindra (M&M;) declined 1.06% to Rs 562. It announced signing an agreement to acquire 100% stake in Italy based Engines Engineering. Engines Engineering is in the business of two wheels design and developing of motorcycle prototype.

However, Indias largest car maker by sales Maruti Suzuki India rose 2.34% to Rs 764.

Interest rate sensitive sectors - banking and realty declined on fears of hike in interest rates or CRR after inflation may rally to double digit post fuel price hike announced yesterday, 4 June 2008.

HDFC Bank (down 1.89% to Rs 1193), ICICI Bank (down 0.5% to Rs 754) edged lower. However State Bank of India rose 0.09% to Rs 1332.90.

Indiabulls Real Estate (down 5.11% to Rs 391), HDIL (down 1.61% to Rs 627.05) and DLF (down 3.1% to Rs 538.40) edged lower from realty pack.

Shares of upstream companies rallied after the subsidy burden that they have to bear became clear post fuel price hike announced yesterday, 4 June 2008, which had remained uncertain until now.

Oil and Natural Gas Corporation soared 7.51% to Rs 953.65 and Gail India jumped 4.93% to Rs 389.20.

Upstream oil companies ONGC and GAIL India absorb most of subsidy burden arising in the form of under-recoveries of oil marketing companies. The duo will now have to bear Rs 45,000 crore in subsidy burden, which is at historically high levels.

IT stocks rose as US dollar firmed against the Indian rupee. Satyam Computer Services (up 3.96% to Rs 504.90), Infosys (up 3.5% to Rs 1935.50), TCS (up 2.08% to Rs 977.50) and Wipro (up 0.43% to Rs 499.45) edged higher.

Hindustan Unilever (up 2.86% to Rs 237), HDFC (up 1.66% to Rs 2,345), NTPC (up 1.93% to Rs 160.80), Ranbaxy Laboratories (up 1.96% to Rs 529.05), Hindustan Unilever (up 2.24% to Rs 235.55), were the top gainers from Sensex pack.

Ambuja Cements (down 2.06% to Rs 85.70), Larsen & Toubro (down 1.81% to Rs 2715), Reliance Infrastructure (down 1.69% to Rs 1051), BHEL (down 1.56% to Rs 1448.15), Reliance Industries (down 2% to Rs 2261.05), were the top losers from Sensex pack.

Indias second largest telecom services provider Reliance Communications declined 0.18% to Rs 539. As per reports Reliance Communications and South Africa's MTN have begun due diligence as they inch closer to creating a global top-10 telecoms firm. Reliance Communications has also engaged Deutsche Bank for the possibility of roping in private equity firms for part of the deal, the source said. Blackstone Group Carlyle Group and Apax were interested to put in $4 billion to $5 billion, reports added.

Indias largest cement maker by sales ACC rose 1.79% to Rs 644.10. Its cement shipments in May 2008 fell to 1.8 million tonnes from 1.82 million tonnes a year earlier. Production fell to 1.79 million tonnes from 1.82 million tonnes during the similar period.

PVR jumped 8.22% to Rs 181.60. JP Morgan Mauritius Holding and ICICI Venture Funds Management Company have in-principlally agreed to invest Rs 60 crore each aggregating to Rs 120 crore in company's wholly owned subsidiary PVR Pictures. PVR Pictures is engaged in film production and distribution.

NIIT rose 2.93% to Rs 107.05 after it bagged new orders to impart computer education to 1.9 million school students in Bihar and Maharashtra.

TVS Motor Company declined 0.72% to Rs 34.55 as it entered into a contract manufacturing arrangement with Mahabharat Motors Manufacturing whereby TVS motor cycles will be manufactured at the latters two-wheeler manufacturing facility that is located on the outskirts of Kolkata.

Biocon rose 0.68% to Rs 464. Reortedly, over a year after its nephrology foray, Biocon says it is eyeing to be the top domestic player in the growing segment in the next 4-5 years. Its erythropoietin (EPO) brand to treat anaemia in renal failure patients is alone targeted to be number one in 3-5 years with 30% market share, according to Biocons CEO, Ms Kiran Mazumdar Shaw.

In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby 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.

Meanwhile, the ruling Left Front in West Bengal has called a 12-hour general strike today, 5 June 2008 in protest against the 'anti-people' decision of the Centre to raise the prices of petrol, diesel and cooking gas.

Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets.

Asian markets were mixed today, 5 June 2008. Japan's Nikkei Singapore's Straits Times, South Korea's Seoul Composite, and China's Shanghai Composite, were down by between 0.08% to 0.65%. Hong Kong's Hang Seng and Taiwan's Taiwan Weighted were up between 0.76% to 1.28%.

US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade.

The Dow Jones industrial average slipped 12.37 points, or 0.10%, to 12,390.48. The Standard & Poor's 500 index was down 0.45 points, or 0.03%, to 1,377.20, while the Nasdaq advanced 22.66 points, or 0.91%, to 2,503.14.

As per provisional data, foreign funds sold shares worth a net Rs 1198.80 crore yesterday, 4 June 2008. Domestic funds bought shares worth a net Rs 419.81 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 334.96 crore in the futures & options segment yesterday, 3 June 2008. They were net buyers of index futures to the tune of Rs 82.12 crore and bought index options worth Rs 26.18 crore. They were net buyers of stock futures to the tune of Rs 225.94 crore and bought stock options worth Rs 0.72 crore.

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