Overnight cash rates plunged to 18-month lows on Monday and bond yields advanced after the RBI limited the amount of cash it would absorb in daily market operations and added it would issue market stabilization bonds. From Monday, RBI will absorb a maximum of Rs 30 billion, or $675 million per day at its reverse repurchase auction window.

Trading highlights

Reliance Industries was the most-active stock with a turnover of Rs 234.80 crore followed by Reliance Communications and Apollo Hospitals.

Advancers

Gujarat Ambuja Cements and Grasim Industries were the only two large-cap advancers. Gujarat Ambuja finished 2% higher at Rs 111.9, while Grasim edged 0.2% higher at Rs 2,102.1.

Decliners

Pharmaceutical large-cap Ranbaxy laboratories led the decliners, down 7.6% to Rs 321.1, while cap maker Maruti Udyog declined 6.6% to Rs 779.3, having dipped to a low of Rs 781 earlier.

Other prominent decliners included Dr Reddy’s, down 6.4% to Rs 618.7, Tata Steel declining 5.1% to Rs 420.3, Wipro off 6.3% to Rs 537.2 and L&T shedding 5.5% to Rs 1,383.8.

Index heavy Reliance Industries declined 5.03% to Rs 1,251.15 on a huge 18.50 lakh shares traded on BSE. R Systems International plummeted 17.93% to Rs 133, after the company posted a poor fiscal performance for Q4 ended December 31 2006. Shares of Infosys dropped 4.6% to Rs 2,006.6 and Tata Consultancy slipped 3.8% to Rs 1,162.20.


7:00AM European markets declined Monday on global market weakness.
European markets were sharply lower on Monday. The German DAX Xetra 30 dropped 2% to 6,472.81, the French CAC 40 fell 1.8% to 5,328.70 and the U.K. FTSE 100 lost 1.4% to 6,031.40.

Advancers

One of the few advancers was HSBC Holdings edging 0.2% higher after reporting a 5% profit rise in 2006 and lifting its dividend by 11%. It took $10.57 billion in charges, mostly on a poor performance out of the U.S.

Countrywide gained 3.5% after Apollo Management late Friday agreed to buy the real estate chain shares for 1 billion pounds. Getaz Romang shares rose 21% after Ireland CRH agreed to buy it for $442 million.

Decliners

Fears that sharp strengthening for the Swiss franc could hurt exports drove Swatch 3.9% lower. Richemont, which owns the Cartier brand, announced a joint venture to design, manufacture and distribute watches under the Ralph Lauren brand. The venture, which aims to launch products in Autumn 2008, will operate at a loss for a few years. Richemont shares fell 2.6%.

Mining and metals stocks were lower as commodity prices fell. Xstrata, the London-listed miner, was down 4%, while steelmaker Arcelor-Mittal shed 4.1%.

Oil and gold

Gold fell to a five-week low on selling by investors holding the precious metal in exchange-traded funds after a slump in Asian and European stocks. Gold for immediate delivery dropped $5.70, or 0.9%, to $636.75 an ounce in early trade in London.

Crude oil fell for a second day on concern global economic growth will slow, reducing fuel consumption. Crude oil for April delivery fell as much as $1.18, or 1.9%, to $60.46 a barrel on the New York Mercantile Exchange. Brent crude dropped as much as $1.29, or 2.1%, to $60.79 a barrel on the ICE Futures exchange in early trade in London.