The Hindu Business Line : Banking stocks shine on cautious day

Opening the day on a weak note, the market sentiment on Monday seemed to have been rocked by the impact of the catastrophic tidal waves and the possible outcome of Reliance Industries' board meeting.

Click here for table

All the major indices mirrored a similar trend when they started the day lower than the previous close levels and the hesitancy seemed to have percolated to all types of investors.

During the first hour of trade, the indices swayed within a narrow range. However, renewed buying in banking, steel, cement and telecom stocks pushed the indices upwards after the initial bout of dilly-dallying. After hitting the day's high levels, the benchmark indices in both the Bombay Stock Exchange and the National Stock Exchange came under pressure after a wave of profit booking hit the markets.

The selling pressure, which was particularly high among stocks in the information technology, auto and power sectors and a few index stocks, knocked out the gains that the markets' first session had posted. The benchmark indices, as a result, posted very marginal or no gains at all at the close of the session on Monday.

The Board of Reliance Industries at a meeting on Monday approved the buyback proposal and announced that the share buyback programme would be done at a price of Rs 570 per share through purchases from the open market. The company decided to set aside Rs 3,000 crore for the purpose.

The Reliance stock reacted quickly to the news of the buyback and after opening the day on an expectant note at Rs 527, it spurted to an intra-day high of Rs 545. However, profit booking set in after investors' fears about the feuding Ambani brothers and the likely impact on the company and subsidiaries resurfaced later into the second half of the trading session.

As a result, the Reliance stock hit an intra-day low of Rs 505 before finally settling down to close the day at Rs 517, a fall of about 1.3 per cent.

At the BSE, the 30-share Sensitive Index (Sensex) opened the day lower by about 14 points and after the slow rise in buying support, the index climbed to an intra-day high of 6,566 points. The rally could not be sustained and profit booking rolled back the gains and the Sensex finally closed the day at 6,513 points, a gain of a mere 15 points or 0.23 per cent.

However, despite the lacklustre show by the index, there were nearly twice as many stocks from the Sensex that posted gains compared to those that lost during the day's trade.

The biggest gainer from out of the Sensex stocks was Tata Steel with a gain of 4.19 per cent at Rs 374. Maruti Udyog, Reliance Industries and ONGC were all down over 1 per cent.

The situation at the NSE was even worse with the NSE's S&P CNX Nifty index stagnating at the same levels as the previous close after witnessing a brief rally during the first half of the day.

However, the broader CNX Nifty Junior index, which is heavy with mid-cap and high liquidity stocks, posted a smart 1-per cent jump, thanks largely to stocks such as Tata Teleservices, which shot up by nearly 12.5 per cent during Monday's trade at the NSE. On the BSE, the stock had gained nearly 20 per cent.

Banking sector stocks were in the limelight again at the bourses on Monday. At the BSE, the Bankex, index of bank stocks was up about 0.7 per cent. The gainers included UCO Bank, UTI Bank, SBI, Kotak Bank, Corporation Bank, Bank of India and Bank of Baroda.

Other big gainers on Monday were Jindal Vijayanagar Steel, IFCI and Hughes Software.

More Stories on : Stock Markets | Commentary | Sensor

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Jayalalithaa meets Home Minister, seeks aid — Relief operations stepped up in TN

Reliance board clears buyback, backs Mukesh — Anil abstains from voting

Buyback inappropriate at this stage, says Anil

`Tax structure will be industry-friendly'

Tsunami hits Chennai hotels' New Year plans

Govt asks insurance cos to provide immediate relief

No spiralling of drug prices, says Kamal Nath

Geophysicists body to discuss seismicity

Banking stocks shine on cautious day

BoI, Union Bank boards meet; `merger proposal not discussed'

Tsunami may hit non-life insurers