The Hindu Business Line : Auto, cement stocks fuel Sensex rally

It was a day marked by relatively less volatility aided by renewed buying interest in heavyweights such as Infosys, Bajaj Auto, and Dr Reddy's Laboratories.

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The Sensex closed at an all-time high of 8697.6. Earlier, the Sensex opened on a cautious note but soon picked up momentum to reach an intra-day high of 8725.

Mid-cap and small-cap stocks were back in action as reflected by gains of 1.4 per cent and 2.2 per cent in BSE Midcap and Smallcap indices respectively. The S&P CNX Nifty gained 29.6 points or 1.1 per cent to 2630.9.

The positive market sentiment was largely buoyed by impressive September vehicle sales figures.

Continued buying by FIIs and mutual funds and expectations of corporate results for the second quarter-ended September further added optimism.

In the basket of BSE 30 (Sensex) the auto majors along with heavyweights Infosys, and Wipro propelled the benchmark index.

Pharma majors Dr Reddy's and Cipla also ended in the positive territory. HDFC, HDFC Bank, ICICI Bank and Tata Power however succumbed to selling pressures.

Auto stocks were clear winners for the day. The BSE Auto Index rode by 2.9 per cent-its biggest gain since August 2004.

Bajaj Auto gained Rs 76 to Rs 1,768.1. The company's September sales reached a record 2,18,012-33 - up 33 per cent on a Y-o-Y basis.

Stocks of Hero Honda and TVS Motors also surged by 1 per cent and 8 per cent respectively on the back of increased sales.

While Hero Honda's sales for the month of September rose by 22 per cent, sales of TVS Motor increased 16 per cent.

Steel stocks rallied smartly on Monday. Steel major Tata Steel was up 0.7 per cent to Rs 425. The company saw an all-time high production figure of hot metal, crude and saleable steel for its second quarter ended September.

National Steel made its northward journey with a gain of 6 per cent to Rs 30. Mahindra Ugine and SAIL also closed in the green.

Expectations of strong dispatches saw cement stocks surge during the trading session. Cement major Gujarat Ambuja Cement gained 1.9 per cent to Rs 78.5.

Associated Cement Companies, India Cements and Mysore Cement also saw active participation of the bulls and closed with gains.

The banking indices in the BSE and the NSE closed on a weak note. While ING Vysya, IndusInd Bank and Bank of India managed to weather challenges from the bear, UTI Bank, Indian Overseas Bank and Bank of Baroda ended in the red.

Stock-specific action

Mahindra & Mahindra added Rs 10.5 to Rs 388.8. The company plans to expand its markets into West Asia and Europe. There were also reports of the company's plan to buy two automobile companies.

Welspun Gujarat Stahl Rohren rose 11 per cent to Rs 96.4. The company has won an Rs 500 crore order from Indonesia for supply of coated line pipes.

Maruti Udyog gained Rs 20 to Rs 578.3. The company's sales for September rose 12 per cent. It also announced price hike of all models except Swift.

The price hike attributed to higher freight costs, were in the range of 0.2 to 1 per cent.

Larsen & Toubro increased by 0.7 per cent to Rs 1,522.7. There were reports of the company's plan to build two factories to cater to aviation and marine industries.

GAIL which rallied by 6.7 per cent to Rs 281.3 announced after the trading session that it plans to invest about $500 million in a liquefied natural gas facility in Australia.

Among the Nifty constituents Hindalco, IDBI and Ashok Leyland were prominent gainers while ABB, Corporation Bank and Aventis Pharma were conspicuous losers.

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