The Hindu Business Line : Bank stocks sizzle in a see-saw market

ON a day of volatile two-way movements in stock prices, the Sensex rebounded strongly from a loss of momentum in early trading to gain nearly 100 points.

During this buoyant phase, the Sensex scaled past the all-time high of 6,249 to post a new high. Subsequently, profit-booking appears to have set in as the Sensex was once again dragged down.

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It ended the day with a loss of six points over the close on Tuesday. At the National Stock Exchange, Nifty Index ended the day with a gain of about four points.

The scaling of the all-time high record appears to have come on the back of enhanced foreign institutional investor buying interest.

Reports indicate that large institutions such as CalPERS and Morgan Stanley are leading the charge of a number of new institutional investors into the Indian equity markets.

Trading volumes have also risen. At the NSE, trading volumes have been higher than Rs 5,000 crore in the past five trading sessions.

Volumes are, however, still lower than in January 2004 when indices recorded the then all-time high.

Trading volumes at the NSE had exceeded Rs 6,000 crore a day then.

The day, however, belonged to Nifty Junior. This index flared up by 1.59 per cent on the back of a strong showing by bank stocks.

Bank stocks in Nifty Junior such as Canara Bank, UTI Bank, Bank of Baroda, Corporation Bank and Syndicate Bank gained more than 3 per cent.

Since the end of October, Nifty Junior has gained 13.4 per cent, while the Sensex has gained 9.8 per cent. Apart from banking stocks, government-owned oil and gas stocks also firmed up.

Steel stocks shine: Stocks of prominent steel companies such as Tata Steel, SAIL, Essar Steel and Ispat Industries also gained during the day.

The stocks of companies allied to the steel industry, however, did not participate in the rally. Stocks such as Vesuvius India, Foseco India, Nava Bharat Ferro Alloys and Sesa Goa ended the day in negative territory.

Stocks of smaller steel companies such as Bhushan Steel, Sunflag Iron, Monnet Ispat and Uttam Galva also gained.

On Wednesday, metal stocks in general rose in value with nine out of 12 stocks in the BSE Metal Index advancing.

IT, FMCG and Auto pull down indices: Even as stocks of public sector companies were striving to keep the indices rising, stocks of IT and auto sector pulled them down.

FMCG stocks such as HLL and ITC recorded loss on Wednesday. IT heavyweights such as Infosys, Satyam, Wipro, TCS along with the likes of Hero Honda and Maruti Udyog also graced the loser's list. This pulled down the index to close below the all-time historic level set on Tuesday.

News and moves:

The stock of Dena Bank declined by 4.8 per cent. Dena Bank, which had already announced its intention to come out with a follow-on public offer, announced that the price range for the offer would be Rs 23 to Rs 27.

The stock of Suprajit Engineering was down 5 per cent. This was despite the company unveiling a joint venture for setting up a global manufacturing base.

The stock of Maruti Udyog was down 2 per cent. The company announced its sales numbers for November 2004.

The stock of Essar Steel rose 6 per cent. The company, however, denied news reports that it is planning a buyback.

The stock of Orchid Chemicals firmed up a tad. On Tuesday, the company announced that IFC, the international financing institution, had shed close to 8 lakh shares in the company.