Sensex closes above 8200 as recovery continues

07 November 2005

Most analysts and traders were predicting an end to the pull back rally which started a week ago. The Sensex had gained 5 per cent in just two trading sessions last week and the indices were expected to turn weak on profit booking. The weak trend across Asia in today's trade and a further decline in the value of the rupee gave further credence to this view.

The indices opened marginally in the positive and slipped into red soon after. The recovery which started in morning trades itself was steady and the indices continued to gain for the rest of the day. There were no attempts by traders to book profits and it is believed that there was considerable institutional support.

Reports that FII's made significantly large purchases in the derivatives segment in the last trading session added to the sentiment. The sensex crossed the 8200 mark and the Nifty went above 2450 by afternoon and both indices managed to close the day near the day's highs.

Metal stocks, which were beaten down severely in October, were the biggest gainers today except SAIL which was a prominent loser among index stocks. Tata Steel closed more than 4 per cent higher. Nalco added over 6 per cent.

Auto stocks attracted a lot of buying interest, led by M&M and Hero Honda. The former added 5 per cent and the latter closed more than 4 per cent higher. Tata Motors and Maruti closed well over 2 per cent each. Bajaj Auto closed more than half a per cent higher.

Capital goods were the third sector which did very well in today's trade. BHEL was the best performer with gains of over 4 per cent. ABB also added well over 3 per cent. L&T and Siemens also closed with gains.

Technology stocks had a good day today with all the large stocks closing with good gains. TCS added close to 2.5 per cent while Infosys and Wipro added 2 per cent each. Satyam closed almost a per cent higher and HCL Technologies closed well over a per cent higher.

ONGC closed almost 2 per cent higher and Reliance Industries closed more than a per cent higher, both stocks adding considerably to the rise in the frontline indices.

Among the other oil sector stocks, BPCL added close to 3 per cent and Indian Oil closed more than a per cent higher. HPCL also closed with gains. Refinery stocks led by MRPL also attracted good buying interest.

Pharma stocks, led by Ranbaxy, continued their smart recovery. Ranbaxy closed 6 per cent higher followed by Dr Reddy with gains of more than 5 per cent. Cipla closed almost 5 per cent higher.

Tata Power, Reliance Energy and VSNL were among the other significant gainers among large stocks.

Bank stocks were more subdued as most of them closed without much change. HDFC Bank and SBI added around half a per cent each. ICICI Bank closed flat while PNB ended lower.

Sensex closed at 8207, a gain of 134 points, and the Nifty at 2462, higher by 43 points. Nifty November futures closed at a discount of 10 points to the spot index.

Nalco, Ranbaxy and M&M were the major gainers among Nifty stocks while Glaxo, SAIL and PNB were the major losers.

Newswires has reported that SBI would acquire 76 per cent of IndoMonex Bank of Indonesia. The Indonesian bank is reportedly a closely held entity with seven branches. Further details were not available.

According to newspaper reports, the finance ministry has agreed to issue oil bonds to the oil marketing companies to the tune of over Rs15,000 crore. The bonds are being issued as a part reimbursement for the under recovery in retail fuel prices. The ministry has reportedly ruled out the issue of oil bonds to companies like ONGC and Gail which are in a better financial position.

Maruti has reported a 15 per cent rise in volume sales for the month of October to over 50,000 units. Export sales fell almost 78 per cent. The company was helped by a 35 per cent rise in the premium hatchback segment. The entry-level sedan segment saw an increase in volumes of close to 19 per cent. Volumes of its 800 model dropped by 20 per cent.

M&M has reported a 30 per cent rise in tractor sales for the month of October. Total tractor sales were more than 11,000 units helped by strong 44 per cent rise in export volumes. For the first seven months of the current financial year, the company has achieved a 35 per cent rise in tractor volumes.

BHEL informed the exchanges that it has won a new order from Indian Oil for a power station. The order is worth Rs130 crore.

Gujarat Ambuja Cements has announced that its October shipments were almost a per cent lower than the year ago period. Cement production for the month was marginally higher.

Mid-Cap Action

Mid-caps once again picked up momentum after a slow start and outperformed the frontline indices. The more visible mid-caps saw very good trader interest and lifted the mid-cap index by close to 2 per cent by late afternoon. The CNX Mid-Cap index gained 65 points and closed the day at 3602.

Select mid-cap technology stocks saw good buying interest today. Scandent Solutions was the biggest gainer, closing 13 per cent higher. The company had announced that its BPO subsidiary has won a significant overseas contract. Polaris, Aptech, I-Gate Global and Geometric were among the other big gainers.

Smaller pharma stocks were among the best performers in the mid-cap space. Dishman Pharma was the best performer, closing 13 per cent higher. Aurobindo Pharma, Orchid Chemicals, Matrix Lab and Ind-Swift were among the other gainers.

ITI Limited was the best performing mid-cap stock, closing the day locked in the 20-per cent upper circuit. There were media reports that the company may win up to 25 per cent of a large tender from BSNL for GSM equipment. The tender offer is expected to reserve a part of the order for domestic companies and ITI is the only significant domestic manufacturer of GSM equipment. The total value of the tender is expected to be in excess of $5 billion.