The Hindu Business Line : Banking, oil stocks in the limelight

STOCK markets were swamped with news developments during the day with announcements such as the merger of IDBI with its subsidiary, launch of the initial public offer of TCS, decline in profits reported by Hindustan Lever Ltd (HLL), jostled for attention andwith the decline in prices of gilts and rupee.

The indices, Nifty and Sensex, meandered along for most part of the day at levels near the previous day's close. In the last hour of trading, however, prices spurted and ruled higher. Sensex closed with a 1 per cent gain while Nifty ended the day with 1.5 per cent gain.

Banks gain: The announcement of the in-principle proposal to merge IDBI with IDBI Bank galvanised interest in banking sector stocks. Stocks such as ICICI Bank, State Bank of India and a host of other public sector banks registered gains.

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The stock of Andhra Bank, which reported a growth in profit of about 30 per cent, surged by 8 per cent. The stock of Bank of India, which reported decline in profits, lost value. The decline in prices of government securities, which may portend a hike in interest rates, did not douse trading interest in banking stocks.

Oil shines: Oil sector stocks too were in the limelight. The announcement of limited pricing freedom for oil marketing companies followed by reporting of improved financial performance by ONGC and HPCL had a positive effect on oil stocks.

Stocks such as HPCL, BPCL, ONGC and its subsidiary MRPL, IOC and its subsidiary Chennai Petroleum notched gains. Kochi Refineries was the only loser. Buoyed by the performance of oil and banking sector stocks, the PSU Index gained 3 per cent.

Steel stocks surge: The day, however, belonged to stocks from the steel sector. Ranging from large-cap stocks such as Tata Steel and SAIL, to mid-cap stocks such as Jindal Steel and Jindal Vijaynagar Steel to smaller-cap stocks such as Monnet Ispat and Bhushan Steel, stocks in the segment recorded gains.

Stocks of companies such as Kirloskar Ferrous, Tata Sponge Iron and Tata Metalliks also gained. Stocks of companies in industries allied to steel such as Nava Bharat Ferro Alloys and Vesuvius India also rose in value.

Consumer durables firm: The BPL restructuring drive had its rub-off effect on some of the stocks in this sector. The stock price of BF Utilities, a BPL group company, firmed up during the day. Television majors BPL and Videocon International surged ahead by 7 per cent. The stock of MIRC Electronics also gained albeit marginally. The stock of Blue Star, which has reported sharp rise in profits, stayed firm. Trading volumes in these counters were however thin relative to the top traded stocks.

IT gains: Even as the initial public offer of Tata Consultancy Services received strong response, IT sector stocks recorded gains in value. The stock of Subex Systems, which unveiled an acquisition during the week and enhanced the limit for FII investment in the company, gained 4.5 per cent. Stocks of majors — Infosys, Wipro and Satyam — too gained in value. Major gainers were MphasiS, BFL and Hinduja TMT. Losers included Polaris Software, HCL Technologies and Tata Infotech.

FMCG unperturbed: Announcement of disappointing financial performance by Nestle India and Hindustan Lever had little effect on consumer goods stocks. Even as the stock of HLL slipped down 3 per cent, that of Nestle India gained 2 per cent. Stocks such as Tata Tea, Procter & Gamble and Colgate Palmolive also gained in value. Stocks of smaller companies such as McDowell, Jagatjit Industries, Tata Coffee and Ruchi Soya also firmed up.

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