Buying in banking, pharmaceutical and select steel and automobile stocks prompted a steady trend in mid-morning trades, after the market recovered from an early low.
The Sensex was up 6.70 points to 3,336.31 at 12:09 IST. The scrip recovered after it slid to a low of 3,318 minutes from commencement of trading.
Besides some Old Economy stocks, buying interest was also witnessed in software shares.
Yet, market sentiment was underpinned by the surge in global crude oil prices. US crude oil futures hit their highest levels in months on Monday with February crude on the New York Mercantile Exchange up at one point to $32 a barrel on heightening concerns over a possible US-Iraq war combined with the continuation of Venezuela's oil strike. Brent crude oil futures in London rose $1.38 to $29.72 a barrel on Monday.
Washington and London indicated over the weekend that the prospect of a war with Iraq, the world's eighth largest crude oil exporter, was increasingly likely early next year, and a British defense ministry source said the two allies were planning a massive sea-borne invasion. Oil supplies are already tightening for the Northern Hemisphere winter as a Venezuelan general strike cripples output from the world's No. 5 oil exporter. A hike in oil prices is a major cause for concern as oil is a key ingredient in a number of industries.
Satyam Computer witnessed early volumes with the scrip recovering from the early low. The scrip was up 0.6% to Rs 279.75, recovering from the day's low of Rs 276. 22.4 lakh shares changed hands on the counter by mid-morning trades. The stock is thickly traded in the F&O market and the recovery comes ahead of the expiry of F&O contracts on Thursday (26 December 2002). F&O contracts expire on the last Thursday of every month and only two days are left for the expiry of the current month contracts, as the market will remain closed on Wednesday for Christmas. If not squared, F&O positions are compulsorily closed on the last day of expiry ie last Thursday of every month as we have only cash-settled contracts and there is no delivery-settled contracts.
In other front line IT shares, Infosys Technologies (up 0.8% to Rs 4,638), Wipro (up 0.8% to Rs 1,573) and Digital Global Soft (up 1.3% to Rs 611.65), edged higher.
Computer training company Aptech Training (up 8.8% to Rs 34) forged into the limelight today.
Buying interest was witnessed in select pharma stocks like Dr Reddy's Laboratories (up 0.9% to Rs 913), Burroughs Wellcome (up 2.1% to Rs 230) and Merck (up 1.1% to Rs 257.50).
GlaxoSmithKline Pharmaceuticals (up 0.5% to Rs 320) gained after the company said post trading hours Monday that it has entered into an agreement for sale of its entire shareholding in Meghdoot Chemicals Ltd (MCL), together with its right, title and interest for the manufacturing business of MCL, to Maneesh Pharmaceuticals.
On the other hand, Hyderabad-based bulk drugs major Aurobindo Pharma (up 4.2% to Rs 219) jumped up after the company announced the launch of Cefepime, an advanced antibiotic, after trading hours on Monday. Cefepime is effective against both gram positive and gram negative pathogens including pseudomonas, and is life-saving for patients suffering from serious infections treated by oncologists, physicians and surgeons. Antibiotics have emerged as a major therapeutic class in India with around Rs 3,500 crore in sales. Among antibiotics, Cephalosporins are growing fast, because of their proven efficiency against different types of bacteria and their unparalleled safety, according to the company.
However, Ranbaxy Laboratories (down 1% to Rs 576) eased on profit taking. The scrip on Monday closed at a 52-week high of Rs 582.10.
Auto shares witnessed buying interest at lower levels. Telco was up 0.7% to Rs 159.35 recovering from the day's low of Rs 157.05. Telco said last Friday that it had agreed to supply its homegrown Indica hatchback cars to the UK's MG Rover Group, to be sold under the Rover brand in Europe. Under the agreement, the Tata Indica will be manufactured with MG Rover-specific modifications at Telco's plant in Pune. Telco said MG Rover had picked its Indica model to fill a gap in its model range and address the high-volume small car segment. Telco said the Indica would continue to be marketed, in parallel, under Tata branding through its own European distribution network.
Mahindra & Mahindra rose 0.4% to Rs 108, recovering from the early low of Rs 104.
Among steel shares, Jindal Iron & Steel climbed 3.3% to Rs 57.65. The stock is rising on expectations that the company would come out with strong Q3 results.
On side counters, Amtrex Hitachi Appliances (up 20% to Rs 21.95) hit the upper limit soon after news trickled in that Hitachi Home & Life Solutions Inc has announced the plan to acquire the entire shareholding ie 19.40% of the joint venture partner, Lalbhai Group in the company subject to statutory approvals. As a result Hitcahi's shareholding would increase from 35.20% to 54.60%.
BSES (up 0.2% to Rs 227.55) remained steady. On Friday, Reliance made an open offer to mop up an additional 20% stake in BSES at a price of Rs 230.10. Reliance said the offer has been made to acquire management control. Reliance currently holds a 43.4% stake in BSES. The BSES management on Monday issued a statement backing Reliance's offer to take management control.
Bank shares were in demand on sustained buying interest. Canara Bank hogged the limelight on just the second day of its debut as the scrip registered heavy volume of 34.23 lakh shares in mid-morning trades. The scrip, though higher by 2.3% to Rs 50.30, came off the high of Rs 52.