The Hindu Business Line : Equities recover early losses on value-buying

HESITATION seemed to have crept into the stock markets after the benchmark Bombay Stock Exchange (BSE) sensitive index breached the 6,000 points mark again this week. After progressively posting a jump in the indices during nearly every one of the past few sessions, the stock market rally showed some signs of slowing down on Wednesday.

The major benchmark indices witnessed a combination of value buying and profit-booking within a mix of counters that led to counter-balancing of the jump in indices that sustained interest in some stocks had brought about.

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But despite the drop in the index levels by mid-session, a surge in buying support towards the end of the session on Wednesday, enabled the indices to post gains, albeit only marginally. But, despite the hesitation, the sentiment in the market still seems to be upbeat with the index crossing the psychological barrier of 6,000.

At the BSE, the 30-share Sensex opened just below the 6,000-mark and then reacted strongly into the 6,000 points plus territory. Later, the index quickly shot up to over 6,030 points on the back of heavy buying support. However, by noon, caution had started setting in amongst investors and this led to a wave of profit-booking that in turn led to a drop in the indices.

After fluctuating within a narrow band for a couple of hours, the index again gained momentum towards the end of the session, when renewed buying propped up the counters of some of the key index constituents.

The improved sentiment in the markets during the last few trading sessions has been influenced by a sustained increase in investment inflows from foreign institutional investors and also due to the softening of global crude oil prices.

The sectors that were in the limelight on Wednesday included telecom, banking, public sector undertakings, agricultural inputs, information technology, auto and some metals stocks. The sectors that seemed to have, to some extent, fallen out of favour amongst investors included FMCG and steel. The gains posted by mid-cap stocks during Wednesday's session was much higher than the gains recorded by main index constituents and this was evident from the higher gains posted by sectoral, special mid-cap indices and the broader BSE 200 and BSE 500 indices.

The Sensex closed Wednesday at 6,016 points, up about 20 points or 0.033 per cent. On the other hand, the other key indices such as the BSE Teck (up 0.64 per cent), the BSE 100 (up 0.6 per cent), the BSE 200 (up 0.68 per cent), the BSE 500 (up 0.73 per cent), the BSE PSU (up 1.12 per cent) and the BSE Bankex (up 3.39 per cent) told a different story.

With the day's high of 6,036 points, the Sensex was just about 200 points short of the all-time high of 6,249 points. Of the Sensex constituents, 16 stocks declined and 14 closed the day higher.

Amongst the gainers were ACC, Dr Reddy's Laboratories, Hero Honda Motors, HPCL, ICICI Bank (up 4.8 per cent), Infosys Technologies, ONGC, State Bank of India, Tata Steel, Tata Motors, Tata Power, Wipro and Zee Telefilms. Amongst the losers during Wednesday's session were Bharti TeleVentures, BHEL, Cipla, Grasim Industries, HDFC Bank, Hindalco, HLL, HDFC, ITC Ltd, L&T, Maruti Udyog, Ranbaxy Laboratories, Reliance Industries, Reliance Energy and Satyam Computers.

The other major gainers from the information technology sector were Moser Baer (up 8.6 per cent), Hughes Software (up 1.8 per cent), TCS and HCL Infosys.

The gainers from the BSE Bankex index were Andhra Bank, Bank of Baroda, Bank of India, Canara Bank, Corporation Bank, Indian Overseas Bank, J&K Bank, Kotak Bank, Oriental Bank, Punjab National Bank, UCO Bank, Union Bank and UTI Bank.