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Friday, Jun 25, 2004

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Reliance, bank stocks fuel recovery

Aarati Krishnan

A SMART recovery in select oil/gas and banking stocks helped push the indices into positive territory on Thursday's trading.

While the BSE Sensex closed the day 64.5 points up at 4708.6 points, the Nifty climbed 24 points to close at 1470.7 points. Trading volumes also picked up during the day's trading, with turnover on the NSE climbing to Rs 4,906 crore, from Rs 4,073 crore on Wednesday.

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ONGC, Reliance Industries and banking stocks were the key index drivers. Large-caps clearly appear to have fared better than mid-cap stocks, as the Sensex outpaced the broadbased BSE-500 index and the Nifty ran ahead of the CNX-500 index on Thursday.

Within the index securities, the advances to declines ratio was quite favourable, with advances overwhelming declines 24 to 6.

Banks surge: The BSE Bankex was the best performing sectoral index during the day's trading, notching up a gain of 1.70 per cent, to the Sensex returns of 1.4 per cent. Gains in the index were led mainly by the jump in the SBI, HDFC Bank and PNB stock prices.

SBI gained by Rs 13.7 during the day to close at Rs 422.6, while PNB appreciated Rs 10.5 and closed at Rs 260.10. The HDFC Bank stock put on Rs.16.8 to close at Rs.382.2. Through a notification to the exchanges, the company on Thursday scotched speculation that its major shareholders were in talks for a block deal to sell a stake in the company to an overseas investor.

However, not all banking stocks gained; ICICI Bank drifted marginally down, moderating the gains on the Bankex, in which the stock carries a 37-per cent weight. Oil/gas stocks had a mixed day on Thursday. Oil exploration major ONGC ended its losing streak, surging by Rs 19.9 to close at Rs 635.5. The stock was upgraded to a "buy" by a couple of foreign brokerage houses, on the back of prospects for better margins in the coming fiscal. The sharp drop in the company's net profits for the fourth quarter was magnified by one-time items in the preceding year.

Despite its gains, the stock has lost nearly 4 per cent in value over the past week, after it announced its financial performance for 2003-04.

The Reliance Industries stock was another major gainer, adding Rs 11.80 to close at Rs 422.80. In its AGM during the day, the company unveiled the acquisition of a German polyester-maker and a new gas find at Orissa. It was a listless day for IOC, BPCL and HPCL, all of which lost value during the day's trading.

Telecom stocks react to ADC changes: The new TRAI proposals to bring down the access deficit charges (ADC) payable to the State-owned telecom companies had a mixed effect on telecom stocks. The MTNL stock dipped by Rs 10.5 to Rs 117.9 on fears that the ADC payments by private operators would be restricted to BSNL alone. The VSNL stock rose by Rs 8.1 to close at Rs 145.7 on expectations that the new proposals could trim international long distance tariffs. Bharti Tele-ventures ended the day Rs.4 lower at Rs.126.3.

Tech stocks too fared well during the day, with all of the frontline companies notching up

significant gains. Satyam Computer was the major gainer, appreciating by Rs 16.10 to close at Rs 302.30, while Infosys (up Rs.80.6) and Wipro (up Rs.49.5) also posting gains.

Mid-cap activity: Among the mid/small-cap stocks which saw action on Thursday were Titan Industries, Merck and Lupin. Titan Industries gained Rs 5 (close Rs 91.8), Merck gained Rs 27.7 (close Rs 411.8) and Lupin Rs 37 (close Rs 645) during the day's trading.

LIC Housing Finance (down Rs 4.8 to close at Rs 128), Thermax (down Rs 12 to close at Rs 346) and Jindal Steel (down Rs 13 to close at Rs 410.9), were the major mid-cap losers.

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