The Hindu Business Line : Institutional support keeps Sensex in positive zone

CONTINUING the positive trend of the previous trading session, the stock markets witnessed another rally, albeit a more hesitant one on Tuesday. The round of buying in index and second-rung stocks picked up pace towards the end of the trading session that brought the indices back into the black after the initial spate of selling and uncertainty had pulled the major indices below their previous close levels.

The sentiment in the market turned distinctly bearish immediately after the markets opened on Tuesday. There seems to be a continuation of uncertainty related to the policy direction of the new Government. Further, with the nearest threshold in terms of the key indices' levels coming up, Tuesday's session started out on a weak note.

As a result, the Bombay Stock Exchange's Sensitive Index (Sensex) dipped sharply in the first hour of trade, after opening the day at 4,960 points, a 22-point gain over the previous day's close. For most of the remaining part of the session, the Sensex remained in the negative territory, except for the last hour.

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With the potential of the Sensex crossing the psychological benchmark level of 5,000 points, investors turned more cautious and so, there was a drying up of buying support during mid-session.

However, with a surge in institutional support towards the close of the session, the last hour of trading witnessed the Sensex's rebound back into the black. The tenuous trading on Tuesday showed in the gains posted by the index compared to the gains that the index had closed with on Monday.

At the close of session on Tuesday, the Sensex ended at 4,962 points, up by about 24.5 points over the previous day's close. At this level, the Sensex had gained over 2.6 per cent over the past week and still represented an over 50 per cent gain compared to its year ago level of 3,303 points. There were twice as many gainers compared to losers from amongst the 30 stocks that are the constituents in the Sensex.

Some of the big gainers from amongst Sensex stocks were Zee Telefilms (up over 4 per cent), Reliance Energy (up over 4.2 per cent), Bharti TeleVentures (up 3.8 per cent), Maruti Udyog (up over 3.4 per cent), Tata Motors (up over 2.8 per cent), Hero Honda Motors and Reliance Industries (both up over 2.5 per cent) and HDFC Bank and ACC were both up over 1.5 per cent.

The other gainers from the list of Sensex stocks were Gujarat Ambuja Cements, BHEL, Cipla, Dr Reddy's Laboratories, Wipro, ICICI Bank, HDFC, Ranbaxy Laboratories and ITC Ltd. Amongst the losers from the list of Sensex stocks on Tuesday were software major Infosys Technologies, FMCG giant Hindustan Lever, Tata Iron and Steel, Satyam Computers, Grasim Industries, Tata Power, State Bank of India, ONGC, HPCL and Hindalco.

Amongst the other sector-specific indices in the BSE, all the others except the BSE Teck index of technology stocks were up on Tuesday. The BSE PSU and BSE Bankex indices were prominent gainers. Amongst the major gainers in the PSU index of public sector undertakings were Indian Oil Corporation, GAIL India, BPCL, National Aluminium, Shipping Corporation, Bank of Baroda, Kochi Refinery, Oriental Bank, National Fertiliser, Chennai Petroleum, Vijaya Bank and Indian Overseas Bank. Amongst the other banking sector stocks that were in the limelight on Tuesday were UTI Bank, HDFC Bank, Canara Bank and J&K Bank.

Apart from the sector benchmark - Infosys, the other technology stocks that pulled down the BSE Teck index were Moser Baer, HCL Technologies, MphasiS BFL, NIIT, Mastek and e-Serve International.