The Hindu Business Line : FII inflows, falling crude prices push Sensex up

UNABATED buying interest, falling crude prices and continued FII inflows kept the bulls active as the markets ended the week with strong gains. While the Sensex posted a gain of 0.8 per cent during the week, the Nifty was up by 0.6 per cent.

On Friday, the markets opened on a negative note and remained volatile in the early hours of trade. While there was buying interest in the mid-cap counters, profit taking among most of the frontline stocks contributed to the weakness in the markets. However, impressive results by the auto majors and renewed buying among the FMCG, pharma, media, capital goods and banking stocks helped the markets wipe out the early losses. While the Sensex ended the day with a gain of 16.9 points, Nifty closed 8.7 points lower than its previous close.

SBI posted its biggest advance in four months on optimism that Government may allow overseas investors to buy more shares in the bank. The stock added Rs 24.7 to close at Rs 706.2.Indian Overseas Bank and Bank of India were up by about 7 and 4.2 per cent respectively.

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Impressive results by the auto majors attracted widespread buying interest across their counters. Hero Honda was up by 0.7 per cent after its sales in the month of June rose by 12.5 per cent from the corresponding period in the earlier year. Bajaj Auto rose by about one per cent after its June sales increased by 20 per cent. TVS Motors gained by 5.9 per cent after it reported a rise of 18 per cent in its June sales. Tata Motors and Ashok Leyland also posted respectable gains.

With monsoon picking up across the country, FMCG stocks continued to stay in limelight. Henkel Spic flared up by 12.4 per cent. Renewed buying was seen among Tata Tea, Colgate Palmolive, Marico, ITC, HLL, Tata Coffee and Ruchi Soya, which ruled firm.

Extending the gains made on Thursday, most of the pharmaceutical stocks rallied. Matrix Lab and Novartis were the biggest gainers, which advanced up by 8.2 and 6.8 per cent respectively. Other notable gainers included Elder Pharma, Glenmark Pharma, Pfizer, Abbott India, Merck, Orchid Chemicals and Torrent Pharma.

Metal stocks, which took a severe beating in the previous trading session, witnessed a fresh bout of buying activity. Monnet Ispat, Essar Steel, Uttam Galva and Ispat Industries were up sharply by 8.2, 6.0, 4.6 and 4.3 per cent respectively. Bhushan Steel and Strips, Maharashtra Seamless, Tata Steel, SAIL, National Aluminium and Jindal Steel also witnessed fresh buying.

Although there was across the board buying, mid-cap and small-cap stocks put on a stellar performance and saw widespread action. SRF, Amtek Auto, Polaris, Novartis, Ramco Systems and Shree Cements were prominent gainers in the mid-cap space.

Sugar stocks rallied sharply on reports that Pakistan may allow to import sugar from India. Bajaj Hindustan, Dhampur Sugar and Sakthi Sugar registered smart gains.

Media and entertainment stocks continued to find favour with the investors. Shringar Cinema, K Sera Sera, Adlabs Films, GV Films, Television Eighteen and NDTV netted handsome gains.

ONGC recorded a significant drop of 3.7 per cent amid concerns of falling crude oil prices. GAIL, IBP and Hindustan Oil Exploration also suffered losses. However, HPCL and BPCL stayed out of the negative territory.

Frontline stocks that contributed significantly to the bull rally on Thursday came in for sharp selling pressure Wipro, Infosys, Satyam, Hindalco, HDFC Bank, ICICI Bank, BHEL and Reliance suffered sharp losses.

Era Constructions was up by 8.3 per cent after the company announced that it bagged an order to lay cables in the southern state of Andhra Pradesh.

Kale Consultants added 7.3 per cent after the software maker said that it received a five-year contract from Indian Airlines for cargo-handling software.

Reliance Capital advanced by 0.5 per cent after it announced its plans to acquire Adlabs Films.

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