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Thursday, May 18, 2006

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Metal stocks stage sharp recovery

Shanthi Venkataraman

India emerged the leader in the market rally across Asian markets on Wednesday. With a gain of 344 points, its biggest rise in eight months, the BSE Sensex has managed to recoup much of the loss it suffered on Monday's trading session. Metals stocks staged a sharp recovery; the rally was, however, across the board.

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In contrast to the previous trading session that was marked with volatility, it was a relatively smooth sailing for the benchmark indices on Wednesday. The bulls appeared reluctant to let go of the buying opportunities trigged by the recent correction. This was reflected in the advance-decline ratio, with eight stocks advancing for every ten traded on the BSE. Mid-cap and small-cap stocks raced ahead of large-caps this trading session, spurred by the demand for real estate stocks.

Buzzing stocks

The stock of Adani Exports hit its upper circuit limit of five per cent. Ruchi Soya, Goetze India, Gujarat Petronet, Hindustan Oil Exploration and Veejay Lakshmi Engineering were stocks that buzzed in the mid-cap and small-cap space. Stocks that touched new highs include Bombay Dyeing, Crompton Greaves, GMR Industries and Bajaj Auto.

Sector focus

After the hammering it received in the last couple of sessions, metal stocks got a boost on Wednesday. The BSE Metals Index gained five per cent. The stock of Hindustan Zinc soared 12 per cent.

The stock of National Aluminium also gained five per cent after it hiked aluminium prices by six per cent, the second increase this month. Other gainers include Tata Steel, Sesa Goa, Essar Steel and Jinal Stainless.

There was heavy action in the banking space, where several PSU banks attracted investor interest.

The stocks of Union Bank, PNB, Oriental Bank of Commerce, Canara Bank and Allahabad Bank were prominent gainers. Dena Bank was a notable gainer, too, jumping nine per cent. The stock of Karur Vysya Bank appreciated about 5.2 per cent. The bank is to consider offering free shares. A rights offer is also on the cards.

Stocks in the housing and real estate sector continues to hog the limelight. The stocks of Mahindra GESCO, Bombay Dyeing and Bata were major gainers. Dewan Housing also gained on the back of the housing boom.

Stock-specific action

The stock of Lupin rose 6 per cent after it announced that its profits during the fourth quarter had more than doubled. Lupin is to distribute one free share for every one held.

The stock of Apollo Tyres gained about 4 per cent. The company is to meet on May 25 to discuss raising funds by way of a rights offer or public issue in order to fund its acquisition plans.

The stock of Nagarjuna Construction surged 4.3 per cent, after it announced that it had bagged its first international order valued at Rs 116-crore pipeline project, from Muscat. It has also received domestic orders worth Rs 246 crore.

The stock of Ranbaxy Laboratories gained Rs 11.6 to close at Rs 489.6. The company announced that it has entered into an in-licensing agreement for the Indian domestic market with the Netherlands-based pharmaceutical company, Eurodrug Laboratories, for asthma products.

The stock of Gangotri Textiles declined five per cent on the eve of its follow-on public offer.

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