The Hindu Business Line : Buying in bigwigs props up markets

In a move to boost market sentiment, the stock exchanges halved margin requirements in the cash and derivative segments to help brokers meet cash calls without selling shares.

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Weakness in the Asian markets influenced domestic markets into bouts of buying and selling. Buying in stocks such as Tata Motors, ONGC, and Reliance Industries gave a new lease of life to the battered bulls.

The market breadth remained tilted in favour of the bears, with declining stocks outnumbering advances by a ratio of 1.6:1.

Buzzing stocks

While the BSE Midcap index succumbed to challenges from the bears and closed in the red, select stocks in the space evinced fresh buying interest.

Mastek, Mahindra Gesco Developers and Bajaj Auto Finance gained about 12 per cent. ITC gained 3.8 per cent to close at Rs 180.70 on expectations of good results. Force Motors, Unitech, Assam Company and Classic Diamonds managed to hit the upper circuit filter.

Sector focus

The BSE Capital goods index closed on a weak note. A few engineering stocks, however, gained on the back of announcements and plans.

L&T added Rs 26.50 to close at Rs 2,295.40. The company announced a 40 per cent jump in profits for the fourth quarter ended March 2006. It also plans to offer bonus shares.

Jyoti Structures gained 1.6 per cent to end at Rs 489.40. The maker of power transmission towers plans to split each share into five.

Thermax added 2.2 per cent after it announced a 60 per cent jump in fourth-quarter profits yesterday.

A surge in the prices of metals on the London Metal Exchange after the recent decline aided the BSE Metal index to gain three per cent.

SAIL continued on its northward journey with a gain of 3.5 per cent to Rs 77 after a positive price outlook scenario for hot-rolled coil steel.

The company's March quarter profits fell 59 per cent on the back of competition from China and increased cost of raw material. Tata Steel and Nalco surged by seven per cent and five per cent respectively.

Stock-specific action

Tata Motors plans to invest Rs 350 crore to expand capacity its Lucknow factory by three-fold. The expansion is likely to be complete by 2008. The stock gained 3.4 per cent to end at Rs 802.70.

Lupin plans to acquire a stake of 51 per cent in Artifex Finance CVA of Belgium.

Lupin will also buy the units of Artifex, including Dafra Pharma, a drugmaker focussed on anti-malaria medicines. The stock, however, closed in the red.

Karur Vysya Bank plans to come up with a bonus issue of one share for every share held.

It also plans to come up with a rights offer for existing shareholders. The stock gained marginally on back of the news but closed on a flat note.

Bharti Airtel, IOB, Wipro, Nahar Exports, and Punj Lloyd, were significant gainers among the Nifty constituents. Vardhaman Holdings, Aftek Infosys, Kotak Mahindra Bank, Bajaj Hindusthan and RPG Life Sciences were conspicuous losers.