The Hindu Business Line : Rally gets booster, courtesy pharma cos

STOCKS of MNC pharmaceutical companies, led by Pfizer, held centrestage in Monday's trading. Mid-cap pharma stocks had another field day, notching up gains ranging between 10 per cent and 17 per cent. In contrast, stocks of Indian pharma majors such as Dr Reddy's Labs, Ranbaxy Labs and Cipla notched up only modest gains. In a takeover-driven action, West Coast Paper rose by 9.4 per cent following the acquisition a 59.7 per cent stake in Rama Newsprint, Rs 5 per share, from ICICI Bank.

Low intra-day volatility: The other highlight was the lack of volatility in key index stocks, a contrast to the trends in recent days. Conspicuous by their absence were bouts of profit booking that cause sharp intra-day declines, and frantic buying towards the end of trading to offset the losses and to push the markets back into the black.

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The manner in which the gains notched up early in Monday's trading were held through the day points to underlying strength of the ongoing bullish phase. Declining stocks (1129) outpaced advancing stocks (913) on the BSE due to price weakness in stocks belonging to the B2 category. Frontline mid-cap and small-cap stocks exhibited firm trends.

Reliance-driven indices: Reliance Industries account 33 per cent and 40 per cent of the gains in the Nifty and the Sensex respectively. The firm undertone in stocks such as Ranbaxy, SBI, Infosys, ITC and Wipro offered a good supporting cast.

Pfizer Revs Up: With a 15 per cent gain, Pfizer sizzled, as its merger with Parke-Davis is set to go through. The Supreme Court has dismissed the petition filed by minority shareholders against the proposed swap ratio. Aventis, Abbott, Wyeth Lederle, AstraZeneca Pharma and GlaxoSmithKLine Pharma were other prominent gainers amongst MNC pharma companies.

Good day for GSK: Completing a good outing for GlaxoSmithKline-affiliated stocks, GSK Consumer Healthcare, too, posted an increase of 13.7 per cent, closing the day at Rs 349. Burroughs Wellcome - the other listed GSK outfit - gained 10.7 per cent and moved past Rs 500, riding piggyback on GSK Pharma, with which it is eventually to be merged.

BEL's day out: PSU stocks had a laidback day with the notable exception of Bharat Electronics. The stock enjoyed a sharp re-rating with the price marked up by 14.6 per cent. Volumes breached the one-million mark. This is the sharpest one-day spurt (in price terms) for BEL, which has gained 25 per cent over the past three trading days.

Mid-cap pharma story: Aurobindo Pharma, IPCA Labs, Lupin, Shasun Chemicals and Orchid Chemicals, to name a few, posted big-ticket gains as the markets' dalliance with mid-cap pharma stocks continued. Impressive volumes, in absolute terms as well as the day-on-day increase, is a pointer to the strength underpinning this rally. Aurobindo Pharma led the way, gaining 16.5 per cent to close at Rs 627. Small-cap stocks such as Solvay Pharma, Suven Pharma and Elder Pharma also sported smart gains.

Monsanto bests Rs 1,000: The stock of Monsanto managed to break out of the Rs 900 - Rs 940 range. Aided by a spurt of Rs 77, it settled well above the Rs 1,000 mark, the first substantial rise since the stock moved swiftly from Rs 600 to Rs 900, about a month-and-half ago.

Sole IT bright spot: Stocks of IT companies took a breather after two weeks of impressive gains. But SSI spurted sharply by to end the day with 16.6 per cent gain. There has been market talk of possible restructuring of the company's operations, which may also encompass issues of ownership.

Select auto strength: Asahi India Safety Glass, with its prices moving up 12.1 per cent to Rs 92, was the significant gainer on a day when select auto-ancillary stocks were in the limelight. Stocks such as Motherson Sumi Systems, Rico Auto and Gabriel Auto were others that attracted attention. Tata Motors edged closer to the Rs 300 mark.

Key action points: Raymond, Savita Chemicals, ABB, Berger Paints, Grindwell Norton, Procter & Gamble, EIH, JK Industries, Floatglass and Videocon International were other notable gainers.

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Rally gets booster, courtesy pharma cos