The Hindu Business Line : Mid-caps bounce back as markets recover

OPTIMISM took over once again on Wednesday's trading as the markets recovered ground after three consecutive days of losses; but the gains were at best marginal.

The BSE Sensex inched up by 32 points, or 0.6 per cent during the day, to close at 5358.3 points; while the S&P CNX Nifty edged up by 0.69 per cent to 1711.1 points. Stocks in sectors such as technology and automobiles made strong gains during the day. The mid-cap stocks bounced back by a larger margin than large-caps, with the CNX Mid-Cap index jumping by 1.1 per cent, while the Nifty managed just 0.7 per cent.

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Advancing stocks overwhelmed declines in the Sensex basket, with 22 stocks posting gains while just 8 stocks declined. Gains in the Sensex were led by Reliance Industries (which surged by Rs 6.5 to Rs 496.6), Infosys (up by 0.70 per cent to Rs 5,090) and Larsen & Toubro, which jumped by Rs 13.9 to close at Rs 541.9. L&T's proposal to de-merge its cement division into separate entity is set to take effect from May 14.

In line with a range of other automobile stocks, Tata Motors appreciated by Rs 11.7 to close at Rs 440. Tata Motors has recently reported a 58 per cent rise in vehicle sales for April 2004. Key losers among the index heavyweights were Hindalco, which continued its losing streak and closed at Rs 966.9 (down by Rs 25.6), and HDFC, which shed Rs 26.9, and closed at Rs 582.7.

Mid-cap stocks saw plenty of action during the day's trading, with the gainers list led by Bombay Dyeing. The stock zoomed by 10.4 per cent on Wednesday, to close at Rs 158.6, after the company announced good results for the latest quarter. The company has reported a net profit of Rs 24.8 crore for the quarter against a net loss of Rs 1.1 crore for the corresponding period last year. Full year profits for 2003-04 were at Rs 53.5 crore, a 65 per cent improvement over the previous year.

Other notable mid-cap gainers were IDBI (up by 9.5 per cent, to Rs 51.6), CMC (up Rs 25 to Rs 504) and Shree Cement (up 6.1 per cent to Rs 190). Auto stocks were on a high too, with TVS Motors and Ashok Leyland notching up gains of 6 per cent and 5 per cent, respectively. Apart from strong sales numbers in the commercial vehicles segment, the Ashok Leyland stock has also benefited from its proposed inclusion in the MSCI Index. The stock is set to be included in the index with effect from May 28, along with IPCL and Moser Baer. Balrampur Chini was another stock which bounced back strongly after losing ground heavily over the past few days. The stock registered gains of Rs 17 on Wednesday to close at Rs 378.8.

Several mid-caps, however, lost value during the day's trading. HCL Infosystems was among the heaviest losers, the stock shedding Rs 30.9 during the day, to close at Rs 640.6. Unimpressive financials depressed the Tata Infotech stock, which lost Rs 36 during the day to close at Rs 383.3. During the day, the company announced a 46 per cent decline in its net profits for the quarter ended March 2004.

Banking stocks showed a mixed trend during the day, with a few notching up gains, while a few continued to lose ground. The Oriental Bank of Commerce stock was the major loser of the day, shedding Rs 14.9 to close at Rs 274.4. SBI, Canara Bank and Allahabad Bank were gainers in the day's trading, while Union Bank of India and Vijaya Bank were on the loser's list, attracting significant trading volumes. Uncertainties about the new government at the Centre and continuation of the divestment programme continued to dog oil stocks during the day. HPCL, which lost Rs 9.6 during the day, closed at Rs 409.3.