Financial Daily from THE HINDU group of publications
Tuesday, Mar 09, 2004
Markets - Stock Markets
Response to ONGC offer boosts market; Sensex gains 55
Mumbai , March 8
CHEERY response to the Government's discount sale of PSU shares has brought wavering investors and fickle speculators back in form.
As demand for ONGC shares increased to three times the number of shares put on sale by the Government, the stock market was reassured that any doubts of liquidity drying up were misplaced.
The confidence was reflected in renewed buying in shares of State-owned companies, which also helped buoy major indices.
Significantly, higher volumes compared to the previous week and the broad-based nature of the rally reiterated the long-term bullish undertone of the market.
The 30-share BSE Sensex rose about 55 points to close at 5,935.19, within sight of the psychological 6,000-mark and 315 points short of its all-time high.
The broader S&P CNX Nifty of the National Stock Exchange rose nearly one per cent or 17.77 points to close the day at 1,885.25 and ready to face a technical resistance at 1,889 when it opens on Tuesday.
The stock market struck a merry note in the morning as it opened after a weekend of Holi-related revelry.
The day began with strong buying interest in cement counters. February cement dispatches, which grew nearly 11 per cent, had investors lapping up Grasim, ACC, and Gujarat Ambuja stocks in early trade.
The tremendous response to the ONGC sale - subscription is over 400 per cent - rubbed off on IOC, HPCL, BPCL and GAIL, all of which were in demand.
The BSE PSU index gained nearly 4.5 per cent or 175 points to close at 4,082.
"Investors expect the Government to push ahead with the rest of the disinvestment programme once the elections are over," said a dealer with an institutional broking house.
State-owned banks such as State Bank of India, Oriental Bank of Commerce and Bank of Baroda, now considered safe-haven stocks by many investors, attracted buyers.
The formal raising of foreign direct investment limit in private banks to 74 per cent boosted sentiment in the sector, with ICICI Bank and UTI Bank posting gains.
However, tech stocks were depressed by news that the US Senate voted to ban outsourcing Federal contracts.
While Infosys and HCL Tech lost nearly 2.5 per cent each of their value, Wipro lost three per cent and Satyam about 1.8 per cent.
The BSETECk index fell 1.38 per cent or nearly 17 points to close at 1,210.45. The CNX IT of the NSE shed about 2.2 per cent of its value.
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