The Hindu Business Line : Sensex at 12,000: Rally thin

Banking, auto components and tyre stocks are leading the current rally; some banking stocks such as Bank of India and Bank of Baroda are trading more than 20 per cent higher than their prices on April 20.

The Sensex is back at 12K and it's time for celebrations.

But even as you raise a toast you would do well to look back on the journey from 12K to 12K, that is, from April 20, when the Sensex closed above 12,000 for the first time, and now.

If you do, you will notice that the present rally appears short on strength what with three out of every four stocks not participating in it.

In other words, the rally is not a broad-based one.

A study by Business Line of 2,244 stocks traded between April 20 and September 15 shows as many as 1,664 stocks are now trading at levels lower than April 20. These include prominent ones such as Hindustan Lever, Tata Steel, ONGC, SAIL, Tata Motors and Ranbaxy Labs, to name just a few large cap stocks.

Whether it is large caps, mid caps or small cap stocks, the story is the same with only a small number of them driving the market forward.

Interestingly, there has been a shakeout in mid-caps that were at the vanguard of the last rally in the market.

Three out of four mid caps are trading at levels lower than April 20 with some of them trading at values that are lower by 2 to 60 per cent.

Leading The Rally

Others such as ICICI Bank, SBI and Karur Vysya Bank are also quoting at significantly higher prices compared with the last time the Sensex was at 12,000.

A little more than 300 stocks are trading at levels lower than their prices of June 14 when the Sensex hit a low of 8,900 points.

These include stocks such as Dhampur Sugars, Thiru Arooran, EID Parry and Sakthi Sugars, Force Motors and Britannia, to name just a few.

On the optimistic side, there are about 230 stocks that are trading at prices higher than that of May 10 when the Sensex closed at its all time high of 12,612 points.

These include stocks such as Infosys, IPCL, Zee Telefilms and Divi's Labs.

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Sensex at 12,000: Rally thin