The Hindu Business Line : Sensex closes a tad higher after a choppy day

Markets opened marginally higher on Thursday but fell in early trades. Mixed cues from global peers and expiry of the current month derivative contracts marked the day with choppy trades. Sensex remained sideways and closed with a paltry gain of 14 points, whereas Nifty shed around 8 points to close at 3572. Action was predominantly seen in the banking space.

The BSE Bankex struck its all-time high during the day. Overall market sentiment remained positive; the advance-decline ratio was pegged at 1.19:1.

Selling at higher levels trimmed the intra-day gains and with markets inching their way up to the previous highs, profit booking seemed to be the underlying market sentiment. A bounce back in the crude prices led to intra-day losses in oil marketing companies.

Buzzing stocks

The newly relisted stock, Rama Newsprint, continued its upward surge clocking a gain of 20 per cent. The stock has gained close to 150 per cent since it's re-listing on September 20.

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Thermax, Eicher Motors, Sasken Communications and Escorts gained in the mid-caps space. Igarashi Motors, Org Informatics, Binani Industries and Visa Steel were prominent gainers among the small caps.

HDFC, ICICI Bank, Educomp Solutions and Andhra Bank were some counters that hit their all-time highs on Thursday.

Sectoral Gainers

The banks hogged the limelight on Thursday. The Bankex touched an all-time high of 6094, before closing with a gain of 3.70 per cent for the day. The banks had enjoyed a good rally all through the week, on the back of expectations that the RBI would extend its deadline for banks to comply with Basel II norms. Expectation of strong quarter results also underscored the gains.

Oriental Bank was the highest gainer within the index. It posted a gain of 7 per cent for the day. Union Bank, Bank of Baroda, Vijaya Bank, Bank of India and UTI Bank closed with a gain of over 6 percent. Other gainers within the index were Canara Bank, Federal Bank, Allahabad Bank, HDFC Bank and State Bank of India. Kotak Mahindra Bank clocked a gain of 5.64 per cent. The company's board is considering a draft scheme of arrangement for the demerger of its trading and principal including primary dealership undertaking.

The sugar scrips surged back in action as renewed buying interest gripped the sector. Buying was witnessed across the board. Mawana Sugars posted a gain of 20 per cent; Ponni Erode, Sakthi Sugars, Balrampur Chini, Shree Renuka Sugars and KM Sugar gained 10 per cent. The other prominent gainers were Dhampur Sugars, Bajaj Hindustan, Dwarikesh Sugars and Oudh Sugar.

Rising crude prices also augured well for the rally. Oil marketing companies lost as crude prices began to recover amid speculation that OPEC may cut output. Hindustan Petroleum lost 3.53 per cent; Bharat Petroleum and Indian Oil lost around 1 per cent. The other losers within the index were Dolphin Offshore, GAIL, Gujarat Gas and Essar Oil.

Stock-specific action

Tata Power gained 3.11 per cent to close at Rs 549. The company announced on Wednesday that it would commission the first unit of its 1,000-MW Maithon power project in eastern India by the end of 2009, and a second unit by mid-2010.

Mahindra & Mahindra rose around 2 per cent after it signed an agreement to buy Germany's Jeco Holding AG, one of the top five forging companies in Germany.