Financial Daily from THE HINDU group of publications
Thursday, Jun 09, 2005
Markets - Commentary
Columns - Sensor
IT, bank stocks rally takes Sensex to 3-month high
UNABATED buying interest in the IT and banking stocks helped the markets put on a smart show as they ended the day with strong gains.
Strong rally in the stocks of ICICI Bank, Infosys, Reliance Energy and Satyam Computer kept the markets buoyant. Select buying among the metals, FMCG and auto stocks also propped up the indices.
While the Sensex closed at a three-month high of 6858.2, Nifty closed 14 points higher at 2112.4.
The bull run continued for the fifth day. The markets opened on a flat note and witnessed strong buying interest particularly among the frontline stocks.
Continued buying by FIIs in last few trading sessions, firmness in Asian markets, good corporate earnings announcements and the arrival of monsoon in South India contributed to the overall bullish sentiment.
The Sensex opened at 6768.2, reached an intra day high of 6862.8 before closing down at 6858.2, registering a gain of 1.1 per cent.
The Nifty, which opened flat at 2094.7, went on a bumpy ride as it reached an intra day high of 2115.3 before settling to close at 2112.4.
The bullish sentiment was more pronounced on the BSE 30 stock Index as twenty out of the thirty stocks constituting the index advanced.
Strong gains in the stocks of Reliance Group lifted the indices up in the early session. Reliance Industries was up by about two per cent on the expectation of an early settlement of feud between the Ambani brothers. Reliance Energy flared up by over three per cent after the company announced its plans to invest Rs 48,000 crore in Orissa power plant.
There was widespread buying activity among the IT stocks, which kept the momentum high. Infosys was a major gainer, which added Rs 62.5 to its stock. Satyam, TCS, Wipro, Hexaware, Polaris and Sonata Software also recorded smart gains.
Banking stocks continued to be the favour of the day. The BSE Bankex moved up by 1.6 per cent or 62.7 points. While most of the private sector banking stocks were up on hope of announcement of reforms by the Government, the PSU banking stocks advanced further on hopes of a hike in FDI limit.
ICICI Bank and Indian Overseas Bank gained sharply whose stocks were up by 3.5 and 6.3 per cent respectively. Allahabad Bank, Bank of India, UTI Bank, SBI, Vijaya Bank and Karnataka Bank also rose significantly.
A bout of buying activity took place across the counters of select FMCG stocks. While ITC was up two per cent, Nestle, Tata Coffee, Colgate Palmolive and Ruchi Soya also closed higher.
However, HLL, Marico, Nirma, Britannia and Tata Tea ruled weak.
Selective buying was witnessed among the metal stocks. Hindalco, National Aluminium and Bhushan Steel shot up by about two per cent. Jindal Stainless, Tata Sponge Iron and Tata Steel were up marginally. However, Jindal Vijaynagar, SAIL, Sesa Goa and Hindustan Zinc came in for some selling pressure.
Auto stocks also witnessed some action. Prominent gainers were Ashok Leyland, Maruti Udyog, M&M and Tata Motors. Those that suffered losses were Bajaj Auto, TVS Motors, and Swaraj Mazda.
Stock specific action: IVRCL rose by 2.9 per cent after the company received a road construction order worth Rs 263 crore.
Nagarjuna Construction was up by 2.1 per cent after the company bagged three new orders aggregating Rs 200 crore to build pipelines and complexes.
Indiabulls Financial Services rose by 9.4 per cent after the Indian brokerage company sold its 42.5 per cent stake in its financial arm to a US-based investment firm.
Other prominent gainers on the Nifty were Amara Raja Batteries, India Cements and Pantaloon Retail.
Those that stayed out of favour were Alstom Projects, Asian Paints, Bombay Dyeing and Raymond.
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