The Hindu Business Line : Sensex ends at 31-month high

Friday's session was marked by a continued rise in institutional buying support and volumes in many of the key index counters were high. With this close of the week, the loses that mid-week sessions recorded has been wiped out and the Bombay Stock Exchange's 30-stock sensitive index (Sensex) has closed at a 31-month high.

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The last time the Sensex crossed the 4,360 points level was in February 2001. On Friday, the Sensex rose by 58.66 points to close at 4,369.17 points, a rise of over one per cent, over the previous close. This second consecutive rise in the Sensex was backed by considerable buying support in key index stocks.

After opening the day at about 4,314 points, the rally picked up steam towards mid-session and the Sensex rose sharply to touch an intraday high of 4,391 points. Later, the index settled to close marginally lower at 4,369 points. Of the 30 Sensex stocks, as many as 24 gained, while six stocks were in the red at the close of Friday's session.

Reliance Industries, the largest private sector enterprise in the country and the biggest contributor to the movement of the Sensex, recorded a large, over 2 per cent increase of Rs 8.9 and closed Friday's session at Rs 419.40. The stock witnessed volumes of over 2.7 million shares and contributed to a rise of 14 points in the index. The company's improved performance in the telecom and petroleum businesses is said to have attracted a sharp increase in institutional buying in the counter.

Hindustan Lever, the other stock that rocks the Sensex, also spurted on an increase in buying on Friday. The stock went up by Rs 6.5 to close at Rs 193.55. ITC, the third most important Sensex stock was also sharply up at Rs 838.05, after posting a Rs 25.45 gain. Some of the other consumer goods (FMCG) and cement stocks amongst the Sensex constituents that seem to have attracted attention due to the steady and successful progress of this year's monsoons were Gujarat Ambuja Cements, Nestle and ACC Ltd.

Steel stocks were again in the limelight on Friday, after the strong possibility of another round of price increases on key steel products drove prices of the key steel counters. As a result of the better price realisations, companies in the sector are posting a turnaround in performance, while for Tata Steel the better prices have led to a sharp increase in its bottomline.

Riding this wave of a potential increase in steel prices again during Friday's session were the two steel majors - Tata Steel and Steel Authority of India (SAIL). Tata Steel was up Rs 9.4 at Rs 267.7 and SAIL was up at Rs 40.20. Some of the other secondary steel stocks were also seen higher on Friday.

The other Tata Group company, Tata Motors was also up on renewed buying interest in the stock. The last trading session of the week witnessed increased activity in this counter after the company announced good sales and performance numbers for the month of August. Tata Motors, manufacturer of the Telco range of trucks, the Indica, Indigo and Safari passenger vehicles, has reported a rise of about 65 per cent in the sales of passenger cars and light commercial vehicles for the first five months of the current fiscal. The stock closed Friday at Rs 283.40, up Rs 8.85 or 3.2 per cent.

Amongst the other gainers on Friday were Hindalco, BHEL, BSES, Ranbaxy Laboratories, Glaxo, HCL Technologies, State Bank, MTNL, ICICI Bank and Bajaj Auto. The prominent losers amongst the Sensex stocks were Dr Reddy's Laboratories, Cipla (after the NPPA pulled it up for overpricing its drugs) and Infosys Technologies, which was down marginally on profit booking. HPCL was a major loser on the BSE, sliding down by Rs 21.1 or 4.9 per cent to close at Rs 410.6 on Friday.

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