Global rally helps indices as Sensex gains over 100 points for the second day

04 January 2006

Strong opening by the US markets on the first day of trade of the New Year helped trigger a rally across Asian markets today. All major Asian indices closed with substantial gains today with Japan, Hong Kong, Indonesia and Shanghai being the major gainers.

Data showing net FII purchases of more than $100 million in the futures market yesterday helped sustain the momentum further.

The indices opened with gains and the Sensex went past 9600 and the Nifty crosses 2900 in early trades. Though there was some volatility during the day, the overall trend remained upwards.

The Sensex saw a new lifetime intra-day high of 9665. The Nifty posted a new lifetime high of 2909.

Both indices maintained the strength till closing and managed to close at new all-time closing highs. Even a 2 per cent fall in ONGC did not upset the sentiment as major gains in other heavyweights helped sustain the momentum.

Gujarat Ambuja was the biggest gainer among index stocks, closing more than 8 per cent higher. The company had reported excellent growth in despatch volumes for the month of December.

Stocks of oil marketing companies were surprisingly among the major gainers despite the 3 per cent surge in crude prices yesterday. HPCL and BPCL closed with gains of nearly 3 per cent each.

Satyam was the best performer among technology stocks, closing more than 3 per cent higher.

Banking stocks generally had a good day, led by OBC which gained more than 2.5 per cent. HDFC Bank and PNB also gained around 2.5 per cent each. ICICI Bank and SBI also closed higher.
Dr. Reddy's maintained it's up trend and closed more than 2.5 per cent higher. Glaxo was another gainer from the pharma space which closed more than 2.5 per cent higher.

ITC gained more than 2.5 per cent on reports that the company may get involved in the operations of confectionery company Nutrine.

Other FMCG stocks had a weak session as Dabur lost nearly 2 per cent. HLL closed more than half a per cent lower.

Among the auto stocks, Maruti and Hero Honda came under some correction while Tata Motors gained over 2 per cent.

Tata Steel, Bharti and Tata Chemicals were the other losers among index stocks.

Sensex closed at 9648, a gain of 108 points, and the Nifty at 2904, higher by 21 points. Nifty January futures closed at a discount of 15 points to the spot index.

US indices surged yesterday as the minutes of the last US Fed meeting indicated an early end to interest rate hikes. The rally in crude oil lifted oil related stocks, further helping the indices.

All the three major US indices closed with one of the best daily gains in recent months. The Dow closed with gains of over a per cent while S&P 500 added more than 1.5 per cent. Gains on the NASDAQ were higher, at close to 1.75 per cent.

Crude oil rose to its highest level in almost three months and closed above the $63 per barrel mark yesterday. Expectations of a production cut by OPEC and low US inventories are driving oil prices higher. January futures on the NYMEX closed at $63.14 yesterday, a gain of more than 3 per cent. The commodity is trading nearly a per cent lower in early European trades today.

Mahindra & Mahindra has announced that it would acquire a 98 per cent stake in a British company manufacturing automobile forgings. Cost of acquisition was not disclosed.

A release by M&M said the UK based company is the largest automotive forgings company in that country and is a supplier to most leading auto manufacturers in UK and elsewhere in Europe. The company had reported revenues of over $40 million during calendar year 2004.

Tata Steel said its sales during the third quarter increased by 11 per cent in volume terms as compared to the same quarter of previous year. The company said production during the latest quarter was 9 per cent higher than the same quarter of last year.

Tata Motors has reported its best ever monthly performance in passenger vehicle sales during December. The company said passenger vehicles sales volumes increased by 35 per cent, as compared to the same month of the previous year, to more than 13,000 units. Exports for the month were marginally lower.

Commercial vehicle sales by Tata Motors rose marginally by over a per cent during December. Total sales volume growth across various segments for the month was over 11 per cent.

According to unconfirmed media reports the ADAE group is planning overseas listing of Reliance Capital, Reliance Communication Ventures and Global Fuel Management. The reports say the listing would be in the form of GDR's and is most likely on the Luxembourg exchange, where Reliance Industries is listed.

The overseas listing is being planned to help the GDR holders of Reliance Industries who would receive shares in the new companies. However, Reliance Communication Ventures and Global Fuel Management would have to be listed on domestic exchanges before an overseas listing.

Mid-Cap Action

Mid-caps maintained their strength for the third day, though the gains on the mid-cap index were lower than those on the frontline indices. The CNX Mid-Cap index gained 30 points and closed the day at 4147.

Multiples operator PVR made its debut on the exchanges today. Issued at Rs225 per share, the stock opened at Rs270 on the NSE and saw a high of Rs309 before closing at Rs295.

Reports indicate that a consortium including NDTV has acquired Radio Today Broadcasting, the radio venture of TV Today. NDTV is believed to have acquired only a minority stake while the other partners would hold majority stakes. Financial details of the deal are not known.

Assam Company has announced that it has entered into an agreement with a US based company to acquire a 33 per cent stake in an Australian exploration block. The two companies have also agreed to cooperate on future deals as well.