The Hindu Business Line : Blue chips drive market rally

THE markets opened on a firm note and maintained the pace throughout the day. Supported by sustained buying in the blue chip stocks, the bellwether indices closed with sharp gains.

The markets continued their gaining streak into the sixth day. The bullish undertone that prevailed was apparent from the advances-declines ratio at 2:1.

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FIIs invested Rs 127 crore in the market on Monday. IT, consumer durables and telecom stocks were the major gainers.

The BSE Sensex opened a firm note. All through the day, the Sensex moved in the positive territory.

Buying interest in the IT majors supported the sharp rally. The Sensex gained 93 points, to close at 6388.48 points. The Sensex has put on a gain of 5 per cent in the last six trading sessions.

The S&P CNX Nifty which opened strong continued to maintain the pace the entire day; the Nifty touched a high of 2003 points before falling to close at 2000.75 points, registering a gain of 1.18 per cent.

Small-cap stocks put on sharp gains. Leading the pack were West Coast Paper Mills, Aarti Industries and Navin Fluorine. The index on the BSE closed with a gain of about 2 per cent.

Infosys shot up by Rs 76 after the company announced an offer to convert 1.6 crore of its shares to ADRs.

Satyam had also announced to convert three crore shares. Its stock surged about 3 per cent to close at Rs 425.8.

Other gainers in the IT sector were Mphasis BFL, Tata Elxsi, HCL Infosystems and Wipro.

Steel stocks attracted buying support after release of the National Steel Policy, which envisages removing supply bottlenecks. Major gainers in the steel sector were Llyod Steel, Electro Steel Castings, Sesa Goa and Man Industries all of which gained more than 3 per cent.

Other metal stocks that gained were Hindustan Zinc, Madras Aluminium, Sterlite and National Aluminium.

Syndicate Bank surged ahead by 9.96 per cent. Positive news of Q4 earnings having increased 118 per cent and a proposed IPO, which would bring down the Government stake down by 10 per cent to 63 per cent, appear to have created interest in the stock with volumes at 33 times of Friday's trade.

Other banking stocks that gained were Canara Bank, UCO Bank, Oriental Bank of Commerce and J&K Bank.

Century Enka shot up 11 per cent; the company had announced a buy-back of shares from Acordis, its European promoter. The company proposes to buy back the entire holding (38.24 per cent) of Acordis at Rs 122. The stock closed at Rs 171.35. It has gained about 26 per cent since last Monday's session.

Accompanied by a six-fold jump in volumes, Opto Circuits shot up 8.56 per cent on positive news of a bonus offer at 2:1 and a dividend of Rs 3.5 per share.

Siemens India and its parent have bagged an order worth Rs 925 crore for design and development of railway coaches. Siemens India is to get 70 per cent of the business from the deal. The stock shot up Rs 64, the volume was significant at about 27 times.

Reports of Asian Electronics being on the lookout for acquisitions in the US and Europe, with an intent to raise its exports, helped the stock surge ahead by 11 per cent. The stock closed at Rs 112 with a two-fold jump in volumes.

Significant gainers among the Nifty constituents were Colgate, ITC, Tata Motors, Zee Telefilms, Sun Pharma and Tata Steel.

Prominent losers were HPCL, BPCL, ABB, HDFC Bank and Reliance Energy.

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