The Hindu Business Line : Positive sentiment continues

MARKETS closed on a positive note after recording strong gains for the second consecutive day. Tuesday saw the Sensex open with an eye for buying and build up on positive sentiments to reach a high of 10195.5. The final hour of trade, however, witnessed some profit booking tapering down the gains marginally.

The Sensitive index added 88.1 points or 0.8 per cent to 10168.1. Auto, pharma and capital goods were key sectors than capitalised on the optimism in the markets. The S&P CNX Nifty gained 29.6 points to close at 3035.5.

Leading the forward march among the basket of BSE 30 was Bajaj Auto. The stock gained 6.5 per cent to Rs 2,571.9. L&T and BHEL were the other stocks that made the northward journey. Hindustan Lever, Grasim and Reliance ended lower.

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Sectors that saw action: Pharma stocks continued to hog the limelight on the back of potential to supply drugs for the avian flu outbreak being witnessed in the country. Dr Reddy's was up 4 per cent to Rs 374. Ranbaxy gained 2.5 per cent to Rs 449.2. Glaxo Pharma also closed on a positive note after reports that the it had applied for clearance to import its avian flu drug. Other gainers include Lupin, Biocon and Alembic.

Capital goods saw heightened buying activity. TIL surged 10 per cent to Rs 189.6. Jyoti Structures and Crompton Greaves also made smart gains. Engineering major Siemens will acquire 50 per cent of Flender for a consideration of $15 million (Rs 65 crore). The stock rose marginally by 0.7 per cent to Rs 4,366.7.

Construction stocks witnessed fresh order inflows and responded positively. Subhash Projects & Marketing bagged an order worth Rs 82 crore from Power Grid Corporation to build electricity lines and stations in Bihar. The stock gained marginally. PBA Infrastructure received road orders worth Rs 65 crore from the NHAI and the Municipal Corporation of Greater Mumbai. The stock added 4.9 per cent to Rs 168.4. IVRCL Infras and Era Constructions were other stocks in the segment that evinced buying interest. Era Constructions opened its sale of $30 million GDR.

A number of small and mid-cap stocks such as NIIT, i-flex Solutions and Moser Baer closed on a weak note. HCL Technologies signed an agreement with Savaje Technologies Inc to develop software for mobile phones. The stock gained about 1 per cent to close at Rs 608.

Pointers to Wednesday's trade: Carborundum Universal, through its wholly owned subsidiary, acquired Anrasive Enterprise Inc of Canada for $1.96 million (Rs 8.6 crore).

Power Trading Corp has signed initial power purchase agreements with utilities that may bring additional revenue of about Rs 6,600 crore a year over the next five years.

The Indian Government has reiterated that the 18.5-million tonnes of sugar production forecast for year ending September will be met. Normal rainfall during the monsoon season has improved crop prospects. This may be a further boost to sugar stocks that are already trading strong.