Sensex crosses 9000 in intra-day trades as rally continues

28 November 2005

The way the indices have been rising for the last few weeks, it was only a matter of time before the Sensex touched the psychological mark of 9000. As there were not many negative cues to cause a correction, the markets continued their onward march today as well.

FII inflows continue to be strong as per the latest data and Asian markets were strong on expectations of the US markets continuing their up trend. The rupee falling below 46 to the US dollar today did not affect sentiment as the currency has been declining for the last few weeks.

The indices opened the day with a large positive gap and the Sensex went above 8960 in early trades. Some profit booking was seen immediately but the indices received good buying support at lower levels. The Sensex went past the early highs before noon and went within striking distance of the 9000 mark before noon. The Nifty went past the 2700 mark comfortably.

After another couple of attempts, the Sensex finally touched the 9000 mark in early afternoon trades but retracted immediately.

After surviving another bout of profit booking in late afternoon trades, the Sensex once again crossed that level in the last half hour.
Sensex recorded a new lifetime high of 9005 during the day and the Nifty posted a high of 2717. Both indices came down marginally from their highs by close.

The huge rally in capital goods and engineering stocks continued unabated today as well. The BSE capital goods index closed with gains of more than 6 per cent, once again led by Siemens which closed more than 8 per cent higher. BHEL added over 3 per cent. ABB and L&T also closed with gains.

FMCG stocks maintained their uptrend on reports of a small price hike for detergent products. HLL closed with gains of over 3 per cent followed by ITC which added over 2 per cent. Dabur and Marico also gained 3 per cent each.

Stocks of oil marketing companies came to the party today. Indian Oil was the biggest gainer closing more than 5.5 per cent higher. HPCL added close to 3 per cent while BPCL gained nearly 2 per cent before closing half a per cent higher.

Auto stocks added to their early gains in late trades and most of the frontline stocks closed with gains of over 2 per cent each. Tata Motors, Maruti, M&M and Bajaj Auto all closed with significant gains. Hero Honda closed marginally lower.

SBI was the star among banking stocks closing over 2.5 per cent higher. HDFC Bank added over half a per cent while ICICI Bank was more subdued and closed lower. HDFC closed nearly 2 per cent higher.

Among the technology stocks, Wipro was the biggest gainer adding nearly 2 per cent. Satyam gained a per cent while TCS closed more than half a per cent higher.

ONGC remained strong throughout the day and helped the indices considerably. The stock closed close to 1.5 per cent higher. Reliance Industries was more subdued, closing marginally higher.

Sensex closed at 8995, a gain of 106 points, and the Nifty at 2712, higher by 29 points. Nifty December futures closed at a premium of 9 points to the spot index.

HLL, BHEL and Dabur were the major gainers among Nifty stocks while Glaxo, HCL Technologies and OBC were the major losers.

After staging a comeback rally last week, crude oil has opened this week on a weak note. January crude oil futures have lost close to 2 per cent in Asian and early European trades today and is trading around $57.5 per barrel.

Wipro may come out with a sponsored ADS issue to reduce promoter's holding from the current 81 per cent. The company is required to reduce the promoter's holding within the next two years as per the recent SEBI directive. The company does not need to raise funds through a primary issue as it has sufficient cash reserves.

The Wipro management has reportedly stated that it may increase the dividend payout in future to return part of its huge cash reserves to shareholders. The company has cash reserves of close to $1 billion. It is also planning to acquire smaller companies in both domestic and overseas markets.

SAIL is reportedly in talks with Australian mining giant BHP Billiton for acquiring a stake in an Indonesian coal mine. Media reports quoting officials of Billiton mentioned that the details are being worked out. The mine is expected to start production in another four years with an annual capacity of 5 million tonnes.

Ranbaxy has confirmed that it has exported a small quantity of anti-bird flu drug Tamiflu to a South-east Asian country. Roche's patent for the original drug is reportedly not registered in the importing country.

According to media reports, BHEL is planning to acquire overseas companies as well as set up manufacturing facilities abroad. The company is reportedly drawing up plans to expand its overseas footprint in markets like the Middle East, Africa and South-east Asia.

Mid-Cap Action

Mid-caps surged ahead till early afternoon trades, continuing the momentum from the last two days of the previous week. However, they gave up a significant part of their gains in afternoon trades as traders booked profits at higher levels. Though there were select sectors which saw good buying interest, the momentum was once again missing. The CNX Mid-Cap index gained 16 points and closed the day at 3861.

Narottam Sekhsaria is all set to acquire Everest Industries from ACC Limited. An investment company promoted by a trust set up the Sekhsaria family has reportedly signed an agreement to acquire the shares held by ACC. Everest Industries is the leading manufacturer of asbestos products in the country.

Auto ancillary Talbros Automotive was locked in the 5 per cent upper circuit after the company announced that it is evaluating the merger of an unlisted forgings manufacturer with itself.

MSK Projects informed the exchanges that its board has approved an FCCB issue to raise up to $12 million.