Heavyweights lift indices a per cent higher

07 December 2005

The trend of alternate days of buying and selling continued today as well as the markets are still searching for a clear direction. While there are no big developments to help the indices go past the previous highs decisively, stocks are attracting buying interest on every decline.

The decline of the rupee is helping the indices as technology stocks, major beneficiaries of a weak rupee, have been firm over the last few days. The rally in ONGC is also helping the indices considerably.

After opening with decent gains, the indices held on till mid-morning when news of FII selling in the derivatives segment yesterday led to weakness. Buying in technology and banking stocks and heavyweights like ONGC and Reliance saw the indices surge in early afternoon trades.

Indices traded within a range for most of the afternoon session and a bout of late buying saw them close at the highs of the day. The Sensex crossed the 8900 mark in closing trades, though averaging brought down the closing level below that mark.

ONGC maintained its uptrend from yesterday as oil prices are back above the $60 mark. Expectations of a high interim dividend and some overseas deal announcements are also helping the stock. ONGC closed the day with gains of over 2.5 per cent.

Reliance Industries gained close to a per cent and added strength to the indices. Reliance Energy added more than 2.5 per cent.

TCS was the best performer among technology stocks, closing more than 2.5 per cent. Satyam and Wipro added around 2 per cent each while Infosys closed marginally higher.

FMCG stocks had a good day and Dabur was the best performer from the lot. The stock added more than 4 per cent, making it the best performing index stock. HLL and ITC also added well over a per cent each.

Banking stocks were helped by the strong interest among overseas investors for the ICICI Bank issue. ICICI closed more than 2 per cent higher while HDFC Bank added close to 2 per cent. SBI recovered from yesterday's losses and closed more than half a per cent higher.

Cement stocks made an attempt at recovery part of their losses from recent days, but closed with marginal gains. Grasim, ACC and Gujarat Ambuja all closed marginally higher.

Auto stocks made a come back led by Tata Motors which added more than 2 per cent. The two-wheeler pack was led by Hero Honda, which closed more than 2 per cent higher.

Weakness continued in oil marketing and engineering stocks. BPCL and HPCL lost more than a per cent each. Among the engineering stocks, BHEL, ABB and L&T closed nearly a per cent each lower.

Sensex closed at 8896, a gain of 81 points, and the Nifty at 2693, higher by 31 points. Nifty December futures closed at a premium of 2 points to the spot index.

Dabur, MTNL and Shipping Corporation of India were the major gainers among Nifty stocks while BPCL, HPCL and Hindalco were the major losers.

Better than expected gains in productivity for the third quarter helped US markets to close higher yesterday. Higher productivity has led to a decline in labour costs which would in turn ease inflation expectations. Positive outlooks from some leading brokerages on technology stocks like IBM and Apple also helped the markets.

The Dow closed one-fifth of a per cent higher. The S&P 500 and the NASDAQ gained more than one-tenths of a per cent each.
Crude oil closed marginally higher yesterday ahead of the release of US weekly inventory data today. January crude futures on the NYMEX closed at $59.94 yesterday. The commodity is trading higher by half a per cent above the $60 mark in early European trades today.

ICICI Bank has priced its public issue, which closed yesterday at Rs525 per share. Retail investors would be allotted shares at Rs498.75. The ADR offering has been priced at $26.75, one ADR being the equivalent of two equity shares. The ADR's have been priced at a premium of more than 15 per cent to the domestic price.

ICICI Bank's issue received good response from institutional investors and overseas investors. The issue was subscribed over seven times with strong interest from registered FII's. However, the response from retail investors was more subdued. Total bids from small investors were only around 50 per cent of the amount reserved for them.

TCS has announced that it has entered into a partnership with global ERP major SAP of Germany to offer manufacturing solutions to global customers. The companies would offer solutions on a newly launched SAP platform for manufacturing businesses.