The Hindu Business Line : Sensex flares up on strong buying in frontline stocks

The Indian markets shrugged the missile tests conducted by North Korea to post handsome gains at the end of the day's trading. The Asian markets ended in the red, while the European markets also remained weak on account of this development. The Sensex, which started off on a somewhat jittery note, gathered pace in the first hour of trading and sustained its momentum right up to the last hour of trading.

The bellwether ended the day with a 257.4 points (or 2.4 per cent) gain to 10919.64 points. The Nifty also appreciated by 58.45 points (or 1.9 per cent) to 3197.10 points. The market breadth remained positive, with the advances to declines ratio at 1.27 favouring advances in 2,450 stocks traded during the day.

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For the third successive day, the provisional FII turnover (BSE plus NSE combined) was in the positive territory. The net FII buying accounted for Rs 376.46 crore during the day's trading, up from Rs 142 crore and Rs 257 crore in the two previous trading days.

SECTOR FOCUS

Among the BSE sectoral indices, the prominent gainer proved to be the FMCG sector. The expectation of a good monsoon has kick-started interest in this sector. Among the key gainers in this sector were Hindustan Lever and Godrej Consumer.

The metals stock also outperformed the Sensex, logging a gain of 3.11 per cent as non-ferrous metal prices firmed up. The key gainers were Tata Steel, Sterlite Industries and Hindustan Zinc.

The sectors that underperformed were healthcare, IT, oil and gas, automobiles and consumer durables. The banking sector proved to be a marginal underperformer. The banking stocks that bucked the overall market trend were ICICI Bank, HDFC Bank, Union Bank, and Vijaya Bank.

BUZZING STOCKS

The key stocks that were buzzing during the day's trading were:

The Godrej Consumer Products stock appreciated by 4.5 per cent (or Rs 28.4) to close for the day at Rs 662.85. The uptrend in the stock has to be seen in the light of the company's decision to buy the hair colour unit of UK's Rapidol in South Africa.

The Tata Steel stock was another prominent gainer, clocking a 4.9 per cent gain to Rs 563.85. This rise has to be seen in the context of the company's main promoter Tata Sons raising its equity stake from 20 per cent to 30 per cent on a preferential basis.

The first tranche of 5 per cent is to be made at a price of Rs 516 per share amounting to Rs 1,393 crore and another 5 per cent in the form of warrants entitling Tata Sons to subscribe for one equity share after April 1, 2007. These amounts are to be used for long-term fund requirements of Tata Steel to the tune of Rs 6,500 crore.

* Among large cap stocks, the other major gainers were Suzlon Energy, Indian Oil, Reliance Energy and Grasim Industries. The list of losers was littered with sugar stocks ranging from frontline stocks such as Balrampur Chini to the likes of Oudh Sugars, Renuka Sugars, Jeypore Sugars among others.

Some of the second rung IT stocks also figured among the losers such as iGate Global, NIIT Technologies, Aztec Software and Foursoft.