The Hindu Business Line : Capital goods, bank, steel stocks surge

CONTINUING to thumb its nose at doomsayers, the markets headed straight north on Friday, with the BSE Sensex putting on 185 points and the CNX Nifty adding 42 points.

Steel and banking stocks starred in the day's trading, which also saw gains in capital goods stocks and in the Nifty Junior stocks. Market breadth was positive with advances outnumbering declines by a comfortable margin.

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Expectations that Mittal Steel would snap up Arcelor, consolidating two of the largest players in the global steel industry rejuvenated steel stocks. The markets hoped that consolidation would strengthen the pricing power of Indian steel manufacturers and bolster steel prices.

Tata Steel was the biggest index gainer, putting on 8.8 per cent during the day's trading. L & T was the other major contributor to index gains, adding 5 per cent during the day.

Other steel stocks outside of the index also responded smartly, with JSW Steel, MSP Steel and SAIL making gains of between 6 and 10 per cent. Steel stocks apart, the sector theme that most dominated the day's trading were banking stocks. Not only did the BSE Bankex manage a 3.6 per cent, almost every stock in this index gained upwards of 2.5 per cent. Outside of the index constituents, there was a fairly long list of stocks that added 10 per cent or more during the day's trading. Many of these were stocks of capital goods manufacturers. Not many stocks trended lower during the day, but the exceptions were Trent, Engineers India, Bharat Electronics and Monsanto India. The FMCG pack was subdued after the recent gains, though Marico Industries defied the overall trend, adding significant value.

Pointers to the next weeks's trading

* Pantaloon Retail, Siemens, Bharat Electronics and IOC announced their quarterly numbers after the close of market hours on Friday. Reactions to these numbers may come through on Monday.

* Marico Industries announced the acquisition of the Nihar brand of coconut oil from HLL, after market close. The brand, which has a turnover of Rs.120 crore will give Marico a stranglehold over the coconut oil segment. However, news of this acquisition already seems to have filtered down to the markets as the stock reported unusual gains on Friday.

* According to data from NSE on cumulative bids for the ongoing book built IPOs, Gujarat State Petronet has received bids for about 14 times its offer size so far. This offer closes on January 28. Entertainment Networks was subscribed 32 times; Friday was the last day for accepting bids on this offer.