The Hindu Business Line : Auto stocks pick up pace on strong vehicle sales

The markets soared on Friday as the Central Statistical Organisation reported that the country recorded a growth of 9.1 per cent in the first half of the financial year 2007, its strongest growth in 15 years. This caused banks such as JP Morgan Chase and DBS Group Holdings to raise their forecasts for India's economic growth, setting a bullish undertone.

Close to 60 per cent of the stocks traded on the BSE advanced. For the Nifty, it was a landmark day, as it touched its all-time high of 4,001, before it settled marginally lower at 3,997; the Sensex also climbed to its all time high and closed at 13844.78. Leading the rally were the stocks of Reliance, SBI and Reliance Communication.

Buzzing stocks

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Flex Industries, Gati, Everest Kanto Cylinder, Heritage Foods, Murudeshwar Ceramics, Pioneer Embroideries, Allcargo Global Logistics, Godawari Power and TTK Prestige were notable gainers. Recently listed Global Vectra Helicopter jumped 17 per cent on Friday. Parsvnath Developers, which closed at an 85 per cent premium to its offer price on Thursday, ended the day lower by about 2 per cent. Stocks that witnessed huge volumes include Indoco Remedies, Today's Writing Products, Media Video, Navneet Publications and Heritage Foods.

Auto and auto ancillary stocks picked up pace as leading players announced strong vehicle sales in November and plan new launches. Gainers included Amtek Auto, Balkrishna Industries, Escorts, Hero Honda, Bajaj Auto, Punjab Tractors and Tata Motors. The stock of Bajaj Auto gained close to 4 per cent on the back of strong November sales and its plans to introduce three new motorcycles. The stock of Maruti Udyog also gained.

Strong manufacturing growth also buoyed the stocks of several capital goods players and infrastructure stocks. Prominent among them were ABB, Alstom Projects, Bharat Bijlee, Bharat Electronics, LMW, Punj Lloyd and Siemens.

Banking stocks evinced strong interest. Canara Bank, SBI, UTI Bank, Bank of Baroda and Bank of India recorded gains of 3-4 per cent.

There was selective buying in pharmaceutical stocks. Aurobindo Pharma, Divi's Labs, Dr. Reddy's Laboratories, Sun Pharmaceuticals and Ranbaxy were smart gainers. HSBC recently upgraded its ration on Dr Reddy's to "neutral". IPCA Labs was a notable gainer. The stock spurted by about 9 per cent. ASK Raymond James has revised its earnings estimates for the company.

Stock-specific action

The stock of Ranbaxy gained Rs 10.95 to close at Rs 382. The company has acquired South Africa's largest penicillin maker Be-Tabs Pharmaceuticals for $70 million.

Thomas Cook shot up by 9 per cent to close at Rs 561. The company announced after market hours that it would acquire Travel Corporation of India for Rs 182 crore.

Indiabulls Financial Services gained Rs 9.65 to close at Rs 581.75. The company announced yesterday that it had parted with a 13.3 per cent stake in its wholly owned subsidiary Indiabulls Infrastructure Development for a consideration of Rs 450 crore to Farallon Capital Management and Lakshmi Mittal's Karrick.

The stock of Punj Lloyd gained 7.4 per cent to close at Rs 1110.20. The company has signed an EPC contract for the construction of a petrochemical plant in Thailand