Financial Daily from THE HINDU group of publications
Saturday, Feb 26, 2005
Financial Daily from THE HINDU group of publications Saturday, Feb 26, 2005 |
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Markets
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Commentary Columns - Sensor GDP forecast fuels improvement in sentiment S. Muralidhar
THE Union Budget is to be presented in Parliament on Monday and the uncertainties and concerns about the possible tenor of this annual exercise, which has a massive impact on the economy, were amply displayed by the nervousness at the stock market on Friday. The sentiment during the last trading session before the Budget session was a mix of emotions, with a few sectors emerging as gainers after positive news propped up demand for stocks in these industries. Of the indicators that seemed to have fuelled an improvement in sentiment was the announcement of the GDP forecast for the year 2004-05. The Economic Survey 2004-05 has projected a higher than expected growth rate of 6.9 per cent for the year. The survey has also indicated the continuation of economic reforms and the possibility of a low interest rate regime. This along with the approval of 100 per cent foreign direct investment in construction and bringing investments in that sector under the automatic approval route had led to an increase in speculative activity in the stocks of real estate, construction and cement sectors during the Friday's session. Trading started with most of the benchmark indices in the positive territory on Friday. However, after staying afloat for about two hours, the indices slipped into the red following selling pressure set in. The Bombay Stock Exchange Sensitive Index (Sensex) opened at 6,588 points, touched an intra-day high of 6,622 points, slipped to 6,543 points and finally closed the day at 6,569 points, down about 4.5 points from the previous close. On the other hand, at the National Stock Exchange, the S&P CNX Nifty index closed the day higher by 5.6 points propped by stocks that gained like Gail India, Dabur and HCL Technologies. Amongst the gainers in the BSE Sensex were ACC, Bajaj Auto, Bharti Tele-Ventures, Gujarat Ambuja Cements, Hindalco, L&T, ONGC, Ranbaxy, Maruti Udyog and Satyam Computer. The major losers were Dr Reddy's Laboratories, Grasim Industries, HDFC Bank, Hero Honda, HLL, HPCL, HDFC, ITC, Reliance Energy, Reliance Industries, SBI, Wipro and Zee Telefilms. On the NSE, textile companies, many of which posted double-digit gains, dominated the list of the biggest gainers during the day. The companies that featured prominently in the list included Bombay Dyeing, BSL, Shamken Multifab, Century Textiles, Zodiac JRD-MKJ and Rajasthan Spinning and Weaving Mills. Bombay Dyeing was the biggest gainer with a jump of over 20 per cent during Friday's session. The stock remained frozen at the upper circuit limit at the close of the day's trade. Amongst the stocks that slipped to lower levels on Friday at the NSE were GlaxoSmithKline Pharmaceuticals, Colgate Palmolive India and ABB. IFCI, JCT Electronics and Tainwala Chemicals & Plastics were some of the prominent losers on Friday from out of the other stocks listed on the NSE. The news about the Government's proposal to allow 100 per cent FDI in the construction sector also had a positive impact on stocks in this sector. Stocks such as Gammon India, Madhucon Projects, IVRCL, L&T, Hindustan Construction and Mahindra Gesco closed higher on Friday. Sector-specific indices such as the BSE-PSU and the BSETeck were also seen closing at higher levels. Amongst the information technology stocks that closed Friday in the black were HCL Infosys, i-flex Solutions and Infosys Technologies. The losers from out of the list included Hughes Software, Moser Baer, Patni Computers, MphasiS BFL and Polaris Labs. Media stocks such as NDTV, Television Eighteen, TV Today and Zee Telefilms were all in the red at close of trading on Friday.
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