The Hindu Business Line : Automobile stocks in top gear as crude prices ease

WITH the worries about rising inflation easing a bit and trucker's strike also being called off after the Government's intervention, the stock markets seemed to heave a sigh of relief on Monday.

The improved sentiment was probably also influenced by the passing of the Finance Bill in Parliament without any major changes. Despite the fact that there are still a few nitpicky unresolved issues including the Left parties' position regarding some of the reform measures such as foreign direct investment, Monday's trading session did show signs of a distinct change in investor sentiment.

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The trend of institutional and individual investor support on Monday also could indicate the return of value investing and may be due to the possibility that investors do not feel unduly worried about corporate India's performance being affected this year.

The strong surge in institutional support was also consistent throughout the session on Monday. Except for a few minor dips during mid-session, there was a consistently rising trend amongst the major indices intra-day.

Amongst the sectors that gained during Monday's session were automobile, cement, pharma and FMCG. Select stocks from the banking and information technology sectors were also seen posting gains on Monday.

Stocks in the public sector undertakings segment closed with a mix of both gainers and losers.

At the Bombay Stock Exchange (BSE), the 30-share Sensitive Index (Sensex) opened on a strong note at 5,130 points and quickly jumped to an intra-day high of about 5,193 points.

After a bit of profit-booking in a few information technology stocks that pulled down the Sensex marginally, the index closed at 5,186 points, a gain of 1.36 per cent of the previous week's close of 5,117 points.

There were a total of 24 gainers to 5 losers from amongst the 30 Sensex stocks.

Automobile stocks had to bear the brunt of institutional selling pressure during the last few weeks after the sector fell out of favour amongst investors who felt that the spiralling prices of crude will affect demand for vehicles in the short and medium term.

However, with a semblance of stability emerging in the global prices of crude and with interest rates also remaining relatively unaffected, auto stocks were again in the limelight on Monday.

Auto stocks from among the 30 Sensex stocks that posted handsome gains included Bajaj Auto, up 3.1 per cent; Hero Honda, up 1.33 per cent; Maruti Udyog, up 5.7 per cent, and Tata Motors, which jumped by 3.1 per cent.

Amongst the other index heavyweights that gained were ACC, Cipla, Dr Reddy's Laboratories, Grasim Industries, Gujarat Ambuja Cements, HDFC Bank, Hindalco, HLL, ITC, ICICI Bank, Infosys Technologies, MTNL, ONGC, Ranbaxy Laboratories, Reliance Industries, Reliance Energy, SBI, Tata Steel, Tata Power, Wipro and Zee Telefilms.

The losers amongst the Sensex stocks were Bharti Tele-Ventures, BHEL, HPCL, HDFC and Satyam Computer.

PSU oil companies were affected triggered by the possibility of an erosion in their profitability margins during the current year. In addition to HPCL, the other PSU oil stocks such as IOC, IBP and BPCL also closed lower due to selling pressure.

However, Bongaigaon Refineries and Chennai Petroleum were two PSU oil stocks that bucked the trend.

Most PSU banks were, however, in the black on Monday on strong institutional interest in the segment. Even amongst the new generation private sector banks, Kotak Mahindra Bank was the only loser.

Amongst information technology companies, HCL Technologies, Patni Computers and HCL Infosys were the other losers in addition to Satyam Computer.

Moser Baer, MphasiS BFL and Polaris Labs closed at nearly their previous close levels.

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