Financial Daily from THE HINDU group of publications
Wednesday, Sep 01, 2004
Markets - Commentary
Columns - Sensor
Mid-caps make merry in modest trading
AFTER a lacklustre start to the day's trading, stock prices recovered as Sensex closed in positive territory for the second consecutive day.
Price gains during the day were, however, muted compared to the robust opening to the week's trading on Monday. The Sensex ended the day with a gain of only about 0.11 per cent. Trading volumes, however, remained modest.
The relatively modest level of trading activity may be due to the change in punter's attention to mid-cap stocks. Stocks outside of the BSE-100 accounted for a sizeable 42 per cent of trading volumes.
The high level of trading in smaller stocks was also reflected in the performance of CNX Midcap index as mid-cap stocks, which remained hot in the previous week, continued to rally. This index gained 0.74 per cent compared to the 0.20 per cent gained by Nifty.
Over the past seven trading sessions, Mid-cap index has gained 7.26 per cent compared to the 3.39 per cent gain registered by Nifty. Mid-cap stocks that recorded large gains include Sono Koyo Steering, Saint Gobain, FCI OEN Connectors, Forbes Gokak, Kochi Refineries and Apollo Hospitals. These stocks gained more than 8 per cent.
Oil & Gas shine: In the backdrop of firm crude oil prices, and undeterred by the statement of BPCL Chairman that margins are under pressure, oil & gas stocks stayed firm. Stocks such as Chennai Petroleum, Reliance Industries and Mangalore Refinery gained.
Gas industry stocks such as Gujarat Gas, Petronet LNG and GAIL also firmed up. In BSE's Oil & Gas index, 7 out of the 10 stocks gained in value. Trading volumes in these stocks were also high relative to the total traded value for the day.
Textiles trade higher: Textile stocks remained in demand. Stock prices of Mahavir Spinning, Century Textiles, Garden Silk, Raymond and Bombay Dyeing rose in value. The firm trend is mainly related to the increased opportunities that are said to arise from 2005 due to WTO related issues.
The foreign trade policy announced on Tuesday may have also bolstered sentiment.
Metal stocks attract interest: Nine out of 12 stocks in BSE's Metals index gained in value. Value of trading was also high with BSE Metal index stocks accounting for about Rs 172 crore.
Stocks that gained value were mostly from the mid-cap segment. Prominent gainers include Tata Metalliks, Vesuvius India, Maharashtra Seamless and Welspun Gujarat.
IT stocks in thick of action: The BSE-IT sector topped the trading volume list. At Rs 222 crore, IT stocks were the top traded relative to other industries.
In terms of price action, however, there was hardly any noticeable movement. The IT index gained less than the Sensex. Six stocks in the index gained while six recorded declines. Gainers were again from the mid-cap segment. Rolta India, which declared its financial performance for the year ended June 2004, gained 5 per cent. Aptech, which has unveiled an overseas acquisition, also firmed up.
Banks firm up: The traded volumes in banking stocks remained below Rs 100 crore. Select banking stocks such as Punjab National Bank and Corporation Bank firmed up. The stock of State Bank of India, which announced an increase in lending rates on Monday, declined in value. The stock of ING Vysya Bank shot up by Rs 17 or six per cent.
News and price action: The stock of Today's Writing gained 10 per cent. The company announced that it is foraying into the pencil business. Undeterred by the imposition of a special margin, the stock of Texmaco rose by 10 per cent.
The stock of Biocon gained 4 per cent. The company announced that it is tying up with Novartis for contract research.
The stock of Blue Dart declined by 6 per cent. The companies denied reports of a sale of stake in the company.
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