Financial Daily from THE HINDU group of publications
Wednesday, Mar 17, 2004
Financial Daily from THE HINDU group of publications Wednesday, Mar 17, 2004 |
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Markets
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Commentary Columns - Sensor Marginal recovery in steel stocks Sowmya Sundar
THE Sensex closed marginally higher at 5,525.09 points, 4.43 points up from the previous close. The Nifty lost 14.05 points to close at 1,749.35 points. The stock of Emco Industries, the manufacturer of electrical equipment used in distribution networks, witnessed a surge in activity. Reliance Energy had recently taken a stake in the company. Reliance is planning to substantially increase its expenditure on revamping the distribution network in the next fiscal for which it would source equipment from Emco. The stock gained Rs 9.6 to close at Rs 123.5. Larsen & Toubro, which recently bagged a $ 15 million order to build a hotel for the Radisson group in Bahrai, rose over one per cent to Rs 559. Steel stocks such as SAIL and Tata Steel recovered marginally after they were battered the day before. Concerns of demand from China slowing down and higher inputs cost have pulled down these stocks on Monday. After a steep fall, investors appear to be picking up the stock at lower levels. Stocks of tractor makers such as Escorts, Punjab Tractors and Mahindra & Mahindra were marginally up. The tractor industry is back on the growth track and had posted good growth rates in 2004. The revival in the industry appears to have kindled interest in these stocks, which have been moving up slowly but steadily. The FMCG stocks continue to be sluggish, as the price cuts now appear to be spreading to other categories as well. HLL on Monday announced a `buy one get one free offer for its shampoo brands — Clinic Plus and Sunsilk. Though these offers are expected to pep up volumes and gain market shares, these offers if it extends to more categories might affect the earnings of FMCG companies. Barring Nestle, that announced good earnings numbers on Monday, and Marico, that has declared a bonus issue of one share for every one share held, the stocks of most other players dipped. HLL lost over 2 per cent to close at Rs 150. Brittania and Colgate were among the losers. The stock of CMC dipped by Rs 33.60 as investors appear to be offloading the shares obtained in the recently concluded public offer made by the Government. Since the offer was at a good discount to the market price, investors may be selling to make a quick profit. The stock closed at Rs 538. ONGC, whose public offer too has closed receiving overwhelming response and the cut-off price was fixed at the upper end of the band at Rs 750. This could have sparked fresh buying interest in the stock. Also crude oil prices hit a one-year high on Monday. The stock closed at Rs 834. Few auto component stocks such as Sundaram Fastners, Samkrg Pistons, Munjal Auto, Sundaram Brake Lining and MM Forgings ruled firm despite the dull brad market trend. Samkrg Pistons lost steeply in the recent correction after touching the Rs 70 levels. The stock appears to be recovering after the correction. Pricol, a maker of speedometers, has bagged a Rs 5-crore order for supplying security systems to a US-based security systems manufacturer. The stocks, however, closed marginally lower at Rs 522. Among the more prominent gainers include Mid-day Multimedia, Thermax, Balrampur Chini, Cranes Software, Murudeshwar Ceramics, Shree Cements, Arvind Mills, Ahmedabad Electricity Company and Shyam Telecom. The spurt in the stock of Balrampur Chini was sharp at Rs 9.40. The stock closed at Rs 297.The stock of Mid- Day Multimedia gained 16.4 per cent to close at Rs 33.75. Petron Engineering was another stock that witnessed hectic buying interest. Shrenuj & Co has moved up by 5 per cent to Rs 34.70. The company has announced expansion plans to take advantage of the improving jewellery offtake from India.
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