The Hindu Business Line : Steel stocks brace up; oil cos suffer

THE market closed in neutral territory on Thursday, the last trading session for the week, after see-sawing during the day's trading. The Sensex opened at 6,456 points and plunged to an intra-day low of 6,412 points before recovering smartly to 6,442 levels. This was about 12 points below the previous day's close. The Nifty fared worse than the Sensex, also shedding 11 points before closing at 2,015 levels. Mid-cap stocks lagged the bellwethers, with the CNX Midcap 200 Index losing one per cent, much more than the loss on the Nifty or Nifty Junior. SEBI data on FII trades for the previous day revealed that FIIs had net sold 1.3 billion rupees of shares on Wednesday.

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Index movers

There were plenty of news-driven moves in stock prices during the day. Stocks of the Reliance Group witnessed considerable activity on the reports that the group could be closer to a settlement between the Ambani brothers.

Individual companies in the group, however, denied knowledge of the settlement in separate communications to the stock exchanges. The listed stocks from the Reliance Group — Reliance Industries and Reliance Capital — attracted significant trading volumes during the day. Reliance Industries stock put on Rs 7 during the day before closing at Rs 560.1 The Reliance Capital stock closed flat at Rs 174.6.

ITC, Reliance Industries and Tata Steel were the key gainers in the index basket on Thursday. HDFC, Ranbaxy and Hindalco were instrumental in dragging down the index. Metal stocks across Asia faced some heat on fears that the recent sharp spike in commodity prices would not be sustained over the long term.

Steeling up

Despite these fears, steel stocks were in the spotlight on the stock markets on Thursday. Frontline companies SAIL and Tata Steel attracted substantial trading volumes and so did a host of other steel companies such as Essar Steel, Sunflag Iron and Steel and Uttam Galva Steel. After the close of market hours on Thursday, Tata Steel announced that it was contemplating a significant Rs 5,000 per tonne hike in the long-term contracts with its buyers for hot rolled coils. This follows similar price increases elsewhere in the world.

Stocks of companies in oil exploration and refining continued to be dogged by uncertainty about an increase in petrol/diesel prices. Both HPCL and Indian Oil lost some value, with the former shedding Rs 4 to close at Rs 311 and the latter closing Rs 6 down at Rs 431. The ONGC stock too, lost value at Rs 860.8.

Selective buying in FMCGs

Though ITC was undoubtedly the star performer of the day, the stocks of Britannia Industries and Procter & Gamble also made gains during the day. While the Britannia Industries stock climbed by Rs 13.7 to Rs 864, the P&G Hygiene stock rose by Rs 10 to Rs 566.3. Both the stocks have been recovering from a sharp corrective phase that began the previous week.

Other stocks which notched up significant gains were Siemens (up Rs 24 at Rs 1,640), Indian Hotels (up Rs 18 at Rs 636), Bombay Dyeing (up Rs 15 at Rs 312). The newly listed Jet Airways also shook off its recent negative spell to notch gains of Rs 15 to close at Rs 1,208. The Carborundum Universal stock added Rs 13 to close at Rs 119.6, on news that the company would consider a bonus offer.

Losers of the day

Godrey Phillips (down Rs 75 at Rs 767), ABB (down by Rs 66 at Rs 1110.9), Monsanto India (down by Rs 28.2 at Rs 1,631) and Max India were among the major losers for the day. Stocks such as ABB and Max India have retracing after the sharp gains of the past couple of weeks. While the ABB stock had put on significant value on news of new orders from West Asia, the Max India stock has been buoyed by the possibility of a company decision to sell the telecom business.

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