Broad rally pushes up Sensex

The markets rose to a broad rally during the day, on the back of several positive cues. However, they closed with a slight correction towards the end of trades. The Sensex, closed at 7876, after having scaled an intra-day high of 7,902 while the Nifty was up 20 closing at 2,404.

The CNX Mid Cap also closed at 3,695 after an intra-day high of 3,709.

The rupee fell against the dollar for the third day in a row and touched a new low that was seen last in December 2004, as demand by oil companies pushed up the dollar.

The decline of oil prices to $68 a barrel and the news of a big software order from ABN Amro, healthy auto sales and price hike by metal companies, all helped usher in a positive trend.

Auto stocks hit the decks running with two-wheeler Hero Honda reporting August sales at 2.46-lakh units compared to 1.91-lakh units in August 2004, while rival Bajaj Auto reported a 33.8 per cent growth year-on-year at 1.86-lakh units up from 1.39-lakh units in August last year. Motorcycle sales of South-based TVS Motor Co. Ltd. the country's third largest two-wheeler maker, sold around 60,000 motorcycles in August, up 25 per cent year-on-year.

Maruti sales grew to 46,509 units a year-on-year growth of by 9.5 per cent and M&M reported tractor sales having grown by 44 per cent at 5,688 units compared to 3,939 units.

Tech stocks were boosted with the news of market leaders TCS and Infosys Technologies having won large multi-million-dollar outsourcing contracts from Dutch bank ABN AMRO, estimated at $250 million and ranked among the largest IT outsourcing deals won by any Indian software company.

Metal stocks rose on the news of majors Tata Steel, SAIL and NALCO announcing a price hike. But towards the end of sessions, the two leaders shed some of their earlier gains.

Tata Steel, gained about three-quarters of a per cent, while SAIL, gained around one-and-three-quarters of a per cent, while aluminium manufacturer Nalco gained around 2.2 per cent and Hindalco closed in the negative.

In what could come as a blow to pharmaceutical companies investing in brand building, the task force examining pricing of drugs, has recommended that certain essential medicines not be allowed to have distinct identities. This is among the slew of measures suggested to control prices of drugs which include dismantling the drugs price control order 1995, fixing a ceiling on the retail price of formulations, asking doctors to prescribe only generic drugs and pre-negotiating the price of patented products.

The biggest loser was Dr Reddy's with a three-per cent decline.

Index heavyweights, ONGC was down marginally over half-a-per cent and Reliance Industries closed a per cent higher. Gujarat Ambuja, Ranbaxy, HLL, HPCL.

Tata Power was among the gainers for day despite its NDPL having agreed to equally share the burden of rolling back the 10 per cent hike in electricity tariff.

Among banking stocks HDFC Bank declined 1.2 per cent and Union Bank of India was down 1.1 per cent.

HT Media listed on the BSE at Rs685 and went uo to Rs731 only to close at Rs550 compared to its offer price of Rs530.

HMT is in talks with Mitsubishi for the manufacture of multi-utility vehicles, was up nearly nine-and-a-half per cent.

The finance ministry has made it mandatory for unlisted companies that have raised funds from the overseas markets through the Global Domestic Receipts (GDRs) or Foreign Currency Convertible Bonds (FCCBs) route to list on the domestic stock.

Mid Caps

The top mid cap gainers include KCP Limited, Pudumjee Pulp & Paper Mills, State Trading Corporation of India, Ramco Systems and Godrej Industries.

The top five losers in the mid caps were Jain Studios, Mid-Day Multimedia, Balaji Telefilms, Jagsonpal Pharmaceuticals and Orient Information Tech Ltd.