The Hindu Business Line : FII flows, retail participation fuel positive sentiment

The Sensex breached the 7,850-level to close at 7,859.3 — a gain of 91.3 points or 1.2 per cent. During early part of the trading session, the Sensex hit a low of 7,735.8. It quickly gained confidence and moved to an intra-day high of 7,870.6.

The S&P CNX Nifty also crossed the 2,400-mark and closed at 2,403.2 — up by 33.4 points or 1.1 per cent. Small-cap stocks were in the limelight for the second day in a row with the BSE Small-cap index surging by 1.8 per cent.

Fresh FII inflows after net selling in two sessions last week and improved retail participation added fuel to the positive sentiments in the market.

Oil, auto, steel and IT companies lent support to the indices while telecom, engineering and pharma stocks encountered some profit-booking. The frontline stocks were back in action led by IT segment. The basket of BSE-30 (Sensex) propelled the benchmark index to a new high. ONGC, Bajaj Auto, Infosys and Tata Power were some of the gainers among the frontline stocks. BHEL, Gujarat Ambuja Cements and Ranbaxy however hit the losers' list.

Penny stocks had a field day. Welspun Syntex continued its rally with a surge of 17 per cent while Henkel Spic and Sandesh made gains of about 15 per cent.

The IT space attracted attention after lacklustre performance by frontline stocks for sometime. While the heavyweight IT stocks were back in action, the Mid-cap stocks continued to dominate the scene. HCL Infosys, NIIT and Flextronics surged while Subex Systems and Cranes Software ended on a weak note.

Media stocks had a mixed trend. Balaji Telefilms and Navneet Publications rose by about 5 per cent and 3 per cent respectively. NDTV, Deccan Chronicle and Television 18, however, succumbed to pressure from the bears.

Steel stocks continued to shine on expectations of hike in steel prices. Monnet Ispat was up 6 per cent to close at Rs177. Ennore Foundries and Vesuvius India also made significant gains while Kalyani Steel and Essar Steel ended in the negative territory.

Construction stocks put up a stellar performance led by Gammon India. Comfortable order book position of many construction players may have caused the buoyant mood in this segment. The stock surged by 8 per cent to close at Rs 340. IVRCL Infrastructures was up by 5.5 per cent and Era Constructions continued its smart rally and gained 6 per cent to close at Rs 137. Hindustan Construction gained by 4 per cent in the back of reports that the company plans to expand its overseas market space.

Pharma stocks were a mixed bag. Morepen Lab rose by 9 per cent to Rs 10.4. Biocon, Glenmark, Wyeth were other gainers. Lupin, Ind-Swift Lab and Pfizer ended in the red.

Stock specific action

ONGC posted its biggest gain in more than a year. The stock jumped 5 per cent to close at Rs 1,004, on optimism that the government may raise fuel prices and help reduce the subsidy burden.

DCM Shriram Consolidated added Rs 38.5 and closed at Rs 884.5. It announced plans to come up with a bonus offer and split it Rs 10-share into five shares of Rs 2 each.

Vivimed Labs tripled in its trading debut and closed at Rs 218.3. The stock was allotted at Rs 70.

SpiceJet surged by Rs 6.2 to Rs 85.3.The Hinduja group is in discussion to buy a stake in the discount carrier.

Significant gainers among the Nifty constituents include IPCL, TCS, Nirma and Sterlite Industries. L&T, Raymond and Siemens were prominent losers.

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