The Hindu Business Line : Infotech, auto stocks take indices to new highs

Highlights
Foreign funds buying hits all-time high during March
Institutional buying pushes up Sensex
Advances-to-declines at 17:3
Small-cap stocks too shine

Breaching the previous all-time high and setting new ones has become a matter of routine for the markets during the past few months. Monday's session, the first in opening week of the new financial year, was no different.

General Market Trend

After a lacklustre, mildly negative sideways movement at the bourses on Friday (the last trading session of the previous week and fiscal), the markets witnessed a distinctly positive, bullish rally on Monday.

In fact, the hesitant, nervous trading sentiment that prevailed on Friday seemed to have been replaced by a buoyant frame of mind amongst investors.

Part of the surge in bullishness seems to been driven by analyst views that fund flows from abroad into the Indian stock market is unlikely to slow down in the next financial year.

FII inflows during March this year have also been at an all-time high. The only dampener, if at all, to this continued flow of good news could be the last quarter and annual results of corporates falling short of market expectations.

But, on Monday, institutional buying support was strong enough to push the BSE Sensex past the 11,500-mark for the first time and close at 11,546 points, a new all-time high.

The total gain during the day was an eye-popping 284 points. Though in percentage terms, the gain at the NSE was lower at 2.08 per cent for the Nifty, the 50-stock index also closed at a new peak of 3,473 points.

Sector Focus

The two important sectors that came into sharp focus and posted significant gains on Monday were the information technology and automotive sectors.

Auto sector stocks were in limelight due to the strong volume sales numbers that most companies in the sector had posted for March.

Amongst the auto sector stocks, the major two-wheeler companies were all seen clearly being on the up tick. Car manufacturers and component makers too joined the bandwagon and these stocks also posted considerable gains.

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Stocks from the sector that posted significant gains and trading volumes during Monday's trading session included TVS Motor, Bajaj Auto, Hero Honda, Tata Motors, Maruti Udyog and Hindustan Motors.

The BSE IT and the BSE Teck indices focused on information technology stocks were up by an above average, three per cent plus. Amongst the IT stocks that posted gains, Infosys Technologies was a key gainer, possibly based on market expectations of another bonus issue from the company. The other gainers from the IT sector were Satyam Computer, TCS, Wipro and MphasiS BFL.

Other sector stocks that witnessed heightened activity included ones in the FMCG, telecom, entertainment and pharma industries.

Buzzing Stocks

Amongst the stocks that were in focus was Solar Explosives, the newly listed stock that posted a strong 40 per cent gain over the offer price of Rs 225.

Zuari Industries was up about 20 per cent at Rs 268.

UTV Software and Media Video were two entertainment stocks that gained 13 per cent and 17 per cent respectively.