The Hindu Business Line : FIIs, firm Asian market add to buoyancy

ALL-round buying, firmness in Asian markets and strong FII support propelled the markets as they ended the day with strong gains. While the Sensex closed at 7816.5, the Nifty settled down at 2380.9.

Extending the gains made on Wednesday, the markets opened on a firm note and witnessed broad-based buying. The Sensex opened 19 points higher than its previous close, rallied as it reached an intra-day high of 7842.6 before settling down at 7816.5. The Nifty opened on a flat note but all-round buying lifted the index as it gained 0.9 per cent at its close.

Sustained buying by FIIs along with firm Asian markets added to the overall buoyancy. The rally was broad-based and the bullish sentiment was widespread which was reflected in the advances to declines ratio of 2:1.

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Much of the action took place across the counters of banking, FMCG, pharma, telecom, metal and auto stocks. However, energy and technology stocks failed to put up a smart show.

The bull rally was more pronounced among the mid-cap and small-cap stocks. Notable gainers in this space included Gateway Distriparks, Balaji Telefilms, Berger Paints, Monsanto, Ramco Systems, Gammon India and MRF. Among the small-cap stocks, Adlabs, Bharti Shipyard and Madhucon Projects rose sharply. Mirroring the gains in these stocks, the BSE MIDCAP and BSE SMALLCAP indices gained 1 and 1.7 per cent, respectively.

Fresh buying among the banking sector stocks helped them end the day with strong gains. Leading the pack were ICICI Bank, Punjab National Bank, Oriental Bank, SBI, Allahabad Bank and UTI Bank. ICICI Bank was up by 2.4 per cent on reports that it plans to sell its stake in Federal Bank and South India Bank. However, HDFC Bank, Indian Overseas Bank and Union Bank shed value.

Most stocks in the metals space were in limelight amid renewed buying. Hindustan Zinc was a significant gainer whose stock gained 5.9 per cent. Others that put up a smart show included Madras Aluminium, Kalyani Steels, Sesa Goa, Tata Steel, Uttam Galva and GMDC. Those that ended weak were Jindal Saw, SAIL and Essar Steel.

Bullish sentiment was strong among most FMCG stocks fuelled by the good progress of monsoon. Tata Tea and Harrisons Malayalam shot up by 6.7 and 7.4 per cent, respectively. Tata Coffee, HLL, Marico, Colgate, Nirma, Ruchi Soya and Nestle also posted respectable gains.

It was a field day for most stocks in the pharmaceutical sector. Dabur Pharma was up sharply by 6.7 per cent. Others that attracted widespread buying interest included Dr Reddy's, Cipla, Ranbaxy, Solvay Pharma, Lupin, Pfizer, Elder Pharma and Surya Pharma. Those that stayed out of the rally were Dishman Pharma, Sun Pharma, Divi's Lab and Merck.

Most IT stocks witnessed lacklustre trading. Infosys, i-flex, HCL Technologies, Sonata Software, TCS and iGate Global remained subdued. Those that managed to negate the trend included Satyam, Polaris, Cranes Software, NIIT and Rolta India.

Oil and energy stocks also came in for selling pressure. IOC, ONGC, GAIL, HPCL, Chennai Petroleum and Kochi Refineries ended the day in the red.

Stock specific action:

HMT shot up by 31.4 per cent on reports that the Government may announce an Rs 750-crore revival package.

Kale Consultants flared by 4.5 per cent after the company received a 5-year contract from Cebu Air to supply software that will provide passenger revenue accounting services.

Mawana Sugars added 5.6 per cent to its stock on news reports that it plans to build new plants to double capacity.

Hindustan Construction moved up by 3.7 percent after the company received a contract worth Rs 218.3 crore for construction of tunnel from IRCON International.

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