The Hindu Business Line : FMCG stocks shine on turnaround hopes

JUST ahead of the announcement of quarterly results from Hindustan Lever on Friday, the stocks of most FMCG companies shot into the limelight. The active buying in the sector was seen from the rise in the BSE FMCG Index, which jumped 1.88 per cent - the highest gain among sectoral indices.

The major gainers include ITC (up 3.53 per cent at Rs 1,451.55 on the BSE), HLL (up 0.35 per cent at Rs 143.40) and Colgate (up 2.01 per cent). Other FMCG stocks such as Dabur India and Gillette also gained.

Dealers said the interest in the FMCG stocks has come on expectation of turnaround in the sector, which has seen downtrend in the last few quarters. The talk is that the hike in prices by several of these products is an indicator of this. That several companies have scaled down the various promotional schemes to sell their products is also an indication of the sector coming out of downtrend.

Several institutional investors, who had exited the sector, are again buying the shares of companies in the sector.

Typographical error?

WHETHER it was typing error or just a way to manipulate the Nifty index, but the Satyam Computer stock shot into the limelight in the last 15 minutes of trading on the NSE as the stock touched day's high of Rs 491 - much higher than the closing price. The stock closed at Rs 419.30 on the NSE, up 2.29 per cent; on the BSE, it closed at Rs 418.35, up 1.99 per cent, where it touched a high at Rs 428.

Several dealers were confused over the sudden spurt in the stock in the last few minutes. A few lakh shares were traded at the day's high of Rs 491. Some dealers said this could be due to typing error as the stock was ruling around Rs 419 while others said this could be due to the expiry of derivatives contract today as a higher price in the cash market would affect the price of the stock in the derivatives market.

Index management

ON the last day of the expiry of the derivatives contract, the BSE Sensex and the Nifty closed in positive territory. These indices, which were hovering in the red for most of the trading time, turned positive in the last one hour of trading.

Among the stocks responsible for this were Reliance Industries, ITC, HDFC, HLL and Satyam Computer.

Dealers said these stocks were pushed up because that would result in higher index value. This higher value at close means profits for investors who had bought index futures at lower levels. Several market players, who had bought the Nifty index futures at lower level, are understood to have managed the index in the last hour of trading.

Virendra Verma

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