Financial Daily from THE HINDU group of publications
Thursday, Apr 07, 2005
Columns - Sensor
Pivotals, small-cap stocks make gains
THE seesaw movement in stock prices continued with stocks bouncing back on Wednesday to recoup the losses suffered on Tuesday.
Sensex, which ended above the level of 6,600, gained 0.86 per cent. This was higher than the gains registered by BSE 100, BSE 200 and BSE 500.
Nifty gained 0.82 per cent while Nifty Junior was relatively subdued gaining only 0.36 per cent. CNX Midcap 200 gained 1.06 per cent suggesting that the day belonged to pivotals and small-cap stocks.
This impression was reinforced by advance - decline statistics. Three out of four Sensex stocks gained. In contrast, only about 6 out of 10 stocks in the mid-cap segment, gained in value.
In the small-cap segment, again nearly three out of four stocks gained in value. Incidentally, only 25 per cent of Sensex and small-cap stocks recorded declines while 37 per cent of mid-cap stocks lost value.
In terms of sectors, FMCG, Oil and Metal out performed. Pivotal stocks such as Zee, Reliance, HLL and Tata Steel gained more than 2 per cent.
Metals shine: Metal stocks shrugged off worries about lower demand from China, which dragged them lower on Tuesday, to post strong gains. Steel sector stocks such as Tata Steel, Essar Steel, SAIL and Sesa Goa were the major gainers. Stocks of non-ferrous metals bucked the trend to register losses.
Oil stocks surge: Nine out of ten stocks in BSE Oil & Gas index advanced on Wednesday. The other stock - MRPL - remained unchanged. Major gainers were Indian Oil Corporation, its subsidiary Chennai Petroleum and Reliance Industries.
The rise in prices of Oil & Gas stocks needs to be viewed in the backdrop of persistent news reports that Petrol and Diesel prices will be hiked shortly.
Consumer stocks out perform: Stocks of fast moving consumer goods led by Hindustan Lever reported strong gains. Except Britannia and Gillette, most frontline consumer goods' stocks traded higher.
Dividend boost: Stocks of Everest Industries, VST Industries, Phoenix Lamps and Xpro India gained between 3 and 5 per cent on Wednesday. All the four companies announced that they would be considering the payment of dividend. The stock of Rasoi, which also came out with a possible dividend declaration, however lost value.
Expansion received well: Stocks of CCL Products, Bata India, Sybyl Industries and Maruti rose in value. CCL Products and Bata India are looking at an expansion in their capital base. Sybyl and Maruti announced plans for investment in new ventures.
These stocks gained between 2 and 5 per cent. Mercator Lines, which announced the acquisition of a tanker, also rose in value.
Small-caps sizzle: A number of small-cap stocks gained 20 per cent during the day. Prominent among them were Reliance Industrial Infrastructure, Mangalore Chemicals, Noida Toll Bridge and Dalmia Cement.
Stocks listed in IndoNext such as Kerala Chemicals, Punjab Chemicals, Bloom Dekor and Diamine Chemicals also gained 20 per cent.
Low interest in Banks: Wednesday was a bad day for financial service companies. Private sector banks as well as public sector banks figured in the loser's list. Stocks of public sector banks, which are expanding equity such as Punjab National Bank, Oriental Bank of Commerce, Indian Overseas Bank, and Allahabad Bank too lost value during the day. The BSE Bank index ended in positive territory only because of the strong showing of HDFC Bank and SBI.
Auto stocks skid: The Auto index was the only index to lose value on Wednesday. The decline in value of two-wheeler stocks such as Bajaj Auto, Hero Honda and TVS Motors was mainly responsible for the decline.
Major automobile manufacturers such as Tata Motors, Ashok Leyland and Maruti Udyog gained in value though. The decline in price of the stock of Mahindra & Mahindra needs to be viewed in the backdrop of the Rs 300-crore demand slapped on them by Excise authorities.
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