Financial Daily from THE HINDU group of publications
Wednesday, Aug 31, 2005
Columns - Sensor
Firm global markets, FIIs boost sentiment
BROAD-based buying, firm global markets and continued FII inflows helped the markets reverse the trend witnessed on Monday as they ended the day with strong gains. While the benchmark Sensex gained 1.5 per cent, the broader Nifty was up by 1.3 per cent.
Markets opened with a bang on Tuesday morning and witnessed fresh round of buying interest. There was widespread buying across the counters of IT, cement, metal, auto, pharma, oil and banking stocks that propelled the indices to higher levels.
The Sensex rallied to reach an intra-day high of 7758.4 before it closed at 7745, its biggest single day gain since August 10. The Nifty also closed 30.1 points higher at 2367.8.
The breadth of the market was positive; as many as 878 stocks advanced while about 391 shed value. Crude prices that traded below Monday's record high would have eased concerns about higher fuel costs dampening global economic growth.
Among the sectoral indices, IT index was the outperformer, which gained 2.6 per cent on the BSE and 2.3 per cent on the NSE. Weakening rupee would have boosted the optimism of software exporters, building up an expectation of an increase in their overseas earnings.
Stocks that rallied sharply in Tuesday's trade were Satyam, HDFC, HLL, Infosys, TCS, SBI, Dr Reddy's, Tata Power, Reliance and ICICI Bank.
Stocks in the mid-cap space continued to march ahead on the back of renewed buying interest. Jaiprakash Associates and Jindal Saw were significant gainers whose stocks shot up by 12.9 and 8.2 per cent, respectively. Zee Telefilms, HCL Technologies, Reliance Capital, Videocon International and GE Shipping also made it to the gainers' pack.
Cement stocks displayed strong support. ACC, Grasim, Gujarat Ambuja, India Cement and Madras Cements recorded smart gains.
There was a heavy bout of buying activity across the counters of banking sector stocks. SBI gained 2.1 per cent after the country's largest bank announced its plans for overseas acquisitions. Others that gained notably were Canara Bank, HDFC Bank, Allahabad Bank, ICICI Bank, UTI Bank and Oriental Bank.
Bullish sentiment was strong among the pharmaceutical stocks. Those which recorded significant doses of profits included Divi's Lab, Dabur Pharma, Dishman Pharma and Nicholas Piramal. However, profit-booking in Lupin, Morepen Lab, Pfizer and Shasun Chemicals dragged the stocks down.
A good number of stocks from capital goods and automobiles sector attracted widespread interest from bulls. In the capital goods space, Amforge Industries, TRF and KEC International were notable gainers; while Eicher, Escorts, Apollo and Rane Brakes were prominent gainers among the auto stocks.
It was a good day for most stocks in the metals space. Strong buying support among the stocks of Vesuvius, Madras Aluminium, Sesa Goa, Hindustan Zinc and Jindal Stainless helped them end on a firm note.
Oil and energy stocks, which took a severe beating on Monday, witnessed a fresh round of selective buying interest. ONGC, Reliance, HPCL, BPCL, Petronet LNG and Essar Oil fuelled up while IOC and Hindustan Oil Exploration lost steam.
Bajaj Hindustan was up 6.1 per cent after the company announced its plans to buy a significant stake in its rival Pratappur Sugar and Industries from founders and more stock from other stakeholders.
Hindustan Construction added 3.6 per cent after it won an order worth Rs 17,300 crore to build a tunnel for a railway line in Jammu and Kashmir.
Surana Telecom flared up by about 20 per cent after the phone equipment-maker signed an agreement with Chinese ZTE Corp to supply equipment to Indian service providers.
Trent rose by 11.7 per cent on announcement that the Mumbai-based retailer would buy 76 per cent stake in the Chennai-based bookstore, Landmark.
Prominent gainers on the Nifty were Arvind Mills, Era Construction, Glenmark Pharma, Madhucon Projects and Titan.
Significant losers were Berger Paints, Gokaldas Exports, Nagarjuna Construction, TVS Motor and Timex.
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