Indices at all-time highs
Rex Mathew
03 March 2005
The day saw all major indices making history by closing at all time highs. The fact that FII's made net purchases of more than Rs500 crore on March 1 — the day after the budget when the market actually fell — spread all round optimism in the market. The rally was broad based with as many as three frontline stocks, SAIL, ICICI Bank and SBI, hitting new 52-week highs
Morning trade belonged to super heavyweights ONGC and Reliance while tech stocks led by Infosys brightened late afternoon trade. Sensex closed at 6785, up 98 points and the Nifty at 2129, a gain of 36 points. Nifty futures closed at 4 points premium to the spot index.
As expected, Fed Reserve chairman Greenspan made positive statements on the US economy in his Congressional testimony. While projecting a relatively stable outlook for the US dollar he said there is little evidence that central banks of other countries are dumping the dollar. Nymex light crude rose to $53 to a barrel and pulled down US markets. Both Dow and NASDAQ closed with losses. Among Indian ADR's, HDFC Bank and ICICI Bank were major losers. Infosys and Wirpo lost more than 1 per cent each while Satyam, Tata Motors, VSNL and MTNL managed marginal gains.
Today's rally was led by index heavyweights ONGC and Reliance. Both stocks have been underperformers over the last few months, ONGC on fears of subsidy burden and declining oil prices and Reliance on the fight for control by Ambani brothers. ONGC gained more than 3 per cent on hardening oil prices and on upward revision of estimated gas reserves in the Krishna-Godavari basin. The company is also hopeful of new gas discoveries in the KG-1 basin, which is adjacent to the KG-6 basin where Reliance had struck gas reserves. ONGC Videsh has won a contract for development of an offshore oil field in Qatar. Reliance gained close to 2 per cent.
Auto stocks were much in demand with Tata Motors leading the pack. The company has unveiled a new cross-over vehicle prototype aimed at the European markets in the ongoing Geneva motor show. Ratan Tata, chairman, Tata Motors, also revealed that the much anticipated Rs1-lakh small car project is well on track and the company aims to become the largest player in the Indian market. The company recently launched its small car Indica in South Africa and Turkey. Hero Honda announced launch of a new bike aimed to fight off the challenge to its market leadership from Bajaj. It may be recalled that the two-wheeler companies had reported robust volume growth for February.
PSU banks led by SBI and Bank of Baroda made impressive gains. Union Bank ended with losses after the stock reached its FII limits and the RBI banned further FII buying. ICICI Bank continued its uptrend even though its ADR fell more than 2 per cent yesterday.
