The Hindu Business Line : Sensex rides on positive sentiment

THE positive sentiment in the market continues unabated, with the indices beginning the week on a positive note. The BSE Sensex crossed the 5400-mark on Monday, but selling pressure in the last hours of the session drove it down to 5397.46, 27 points or 0.51 per cent higher than its previous close.

The NSE Nifty gained nearly seven points or 0.39 per cent to close at 1675.20 points. Pharma stocks were in the limelight, while banking stocks were out of favour.

The Sensex opened at 5380 points, ten points higher than the previous close. Strong buying activity in index heavyweights propelled the index well past the 5400-mark to a high of 5421.52 points. Thereafter, selling pressure drove it to a low of 5379.60 points, before it finally settled at 5397 points. For every eight stocks that advanced, seven declined.

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Leading the rally were the stocks of Dr Reddy's and Ranbaxy Laboratories; both gained more than four per cent to close at Rs 756.85 and Rs 1,069.85 respectively.

Other prominent gainers include the stocks of HPCL, Satyam and HDFC. The stock of HDFC gained Rs 12 to close at Rs 623.25. The US-based Capital Research and Management Company has acquired an additional 4.71 per cent stake in the company, taking its total holding to 6.09 per cent.

The stocks of Zee Telefilms and Maruti Udyog were among the losers. The stock of Maruti shed nearly 4 per cent of its value, even as Suzuki Motor of Japan announced its plans of investing Rs 1,050 crore in Maruti to manufacture diesel engines and set up a new plant.

A preferred sector on Monday's trading was IT. Frontline companies such as Infosys, Satyam and TCS advanced, while the stocks of MphasiS-BFL, Moser Baer and Patni Computers also gained smartly. The interest in tech stocks appears to be in keeping with the global markets, particularly the US markets, where a revival in buying interest of tech stocks has been witnessed.

Investor interest in banking stocks appears to have turned sour. The BSE Bankex declined 1.32 per cent on Monday. RBI has hiked the cash reserve ratio to be maintained by banks from 4.5 per cent to 5 per cent; the measure is meant to curb lending. The central bank is also to cut the interest it pays on the cash reserves from six per cent to 3.5 per cent. This is expected to affect the interest income of banks.

Stocks that took a beating include SBI, ICICI Bank, IndusInd Bank, IOB, Bank of Baroda, ING Vysya Bank, Bank of Baroda, to name a few.

The stock of Punjab National Bank lost nearly Rs 5 to close at Rs 271.40, even as the company finalized its plans to float a public offer. The offer would dilute the Government's 80-per cent stake in the bank.

The party in pharma stocks continues. Aside from Dr Reddys and Ranbaxy, the stocks of Cipla, Cadila Healthcare, J.B. Chemicals, Lupin and Sun Pharma gained.

Stocks of MNC pharma companies appear to be attracting buyer interest. The stock of Abbot India for instance, was on an uptrend last week. It gained Rs 21 to close at Rs 561 on Monday.

The stock of JB Chemicals gained Rs 17.5 to close at Rs 322.80. The gains come on the back of news that the company has received US FDA approval to manufacture and market Ciprofloxacin.

Agri-commodity and fertiliser stocks also enjoyed the favour of the markets. The stocks of sugar companies, such as Bannari Amman, Sakthi Sugars and Balrampur Chini gained. Fertiliser stocks such as Chambal Fertilisers, Nagarjuna Fertilisers and Godavari Fertilisers were prominent gainers.

The stocks of Monsanto, KRBL, Bayer Cropscience, Excel Crop Care and United Phosphorous were other gainers.

Other stocks that gained include Indian Hotels, Shanthi Gears, Hotel Leela Ventures, Tata Metaliks, Century Textiles, Dabur India, EIH and MRF.

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