The Hindu Business Line : Sensex makes a strong comeback

Trading highlights
Provisional estimates put FII net purchases at Rs 621 crore
Breadth of the market was in negative
Stocks declined 3.3 pc for the week

Friday's trading session turned out to be the saving grace, in what promised to be a gut-wrenching week for investors. After losing seven per cent in the previous three trading sessions, the markets made a strong comeback. If the Indian market was the worst hit in the pull out from emerging markets, it was definitely the favourite when foreign investors re-entered the market. While emerging markets indices such as Brazil Bovespa and Mexico Bolsa Index were smart gainers, the Nifty's 4.36 per cent gain made it the top gainer across the global markets.

According to provisional estimates, FIIs made net purchases worth Rs 621 crore on the BSE and NSE on Friday. Their role in the day's market rally was also evident from the strong action in the large-cap space. In contrast to the gains in the narrow indices, the mid-cap and small-cap indices ended in the red.

In fact, the breadth of the market was deeply negative, with only 25 per cent of the stocks traded on the BSE ending in the positive territory. Thanks to Friday's recovery, however, the market's decline over the previous week was stemmed at 3.3 per cent.

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Buzzing stocks

Large-caps such as ONGC and Hindustan Lever led the market action. Morgan Stanley has raised earnings estimates and price target for ONGC. The stock of Infosys, too, gained after Credit Suisse raised its rating on the stock.

During the course of the trading session, the stocks of Unitech and Adani Exports managed to touch their 52-week highs. They both subsequently cooled off, even ending in the negative territory. Other stocks that were in the limelight include Dabur, UTI Bank, Geojit Securities and HDFC.

Sector Focus

Auto and metals stocks were, however, the ones that evinced the most favour. After it announced a 45 per cent growth in commercial vehicle sales, the stock of Tata Motors gained about six per cent. The stock of Mahindra and Mahindra also gained after it reported a 14 per cent growth in sales. The biggest gainer, however, was Maruti Udyog, which rose a whopping 13 per cent to close at Rs 769.4. Suzuki and Nissan are to build vehicles together in Suzuki's plant in India.

Metal stocks, which have been worst hit in the recent meltdown, witnessed fresh buying on low valuations. Aluminium stocks Hindalco and Nalco were up eight per cent and six per cent respectively. The stocks of Sterlite and Tata Steel each advanced by about five per cent. Hindustan Zinc, however, continued its losing streak, declining by about six per cent.

Stock-specific action

Punj Lloyd gained nine per cent to close at Rs 896.9 after it announced the acquisition of a majority stake in Singapore-based SembCorp Engineers, a leading utilities and marine group in Asia.

The stock of Ranbaxy rose 5.8 per cent to close at Rs 427.1. The company has received approval from the US Food and Drug Administration to manufacture and market Doxycycline in the US market.

The stock of Wipro rose 5.7 per cent to close at Rs 469.5 following its announcement of a takeover of a European retail solutions company for 41 million.

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