The Hindu Business Line : Buoyant results propel yet another rally

Bouyed by the slew of results announcements from India Inc, which indicate a strong third quarter performance by most frontline companies, the markets witnessed another round of gains on Thursday.

The benchmark indices at both the Bombay Stock Exchange and the National Stock Exchange were on an unstoppable upward move right through the first half of the day's session. However, though there were no indicators to the contrary when the markets were moving up strongly well into the afternoon, investors did move in to book profits later into the session on Thursday.

Intra-day

With the prices of many counters at attractive levels after the bull-run in the morning, institutional investors used the opportunity to pick up some profits of the table during the penultimate hour of trade. This led to a late-afternoon slide in the key stock indices that brought them down intra-day to nearly the previous day's close in double quick time.

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A covering up of positions and a surge in buying support at lower levels in the last hour of trade helped the indices to not only pull back from just above the previous day's close but also to post a mid-way recovery of the day's peak gains. By the end of Thursday's session, the index charts wore the classic inverted-U shape.

At the BSE, the Sensex had quickly run up intra-day to record a gain of nearly 200 points. After hitting an intra-day low of 14,140 points when profit-booking set in mid-session, the Sensex then finally recovered some lost ground to close at 14,218 points. During the day, the BSE Sensex had crossed the 14,300 points mark and the NSE's Nifty index had crossed the 4,140 points mark.

Upward move

Despite the onset of cautious trading and the accompanying volatility during the past few trading sessions, Thursday's session witnessed a strong upward move in the first hour due largely to both the announcement and expectations of good corporate results.

Companies such as Wipro, Siemens, Reliance Industries, Canara Bank, Biocon, Tech Mahindra, Ranbaxy Laboratories, Nicholas Piramal and Zuari Industries announced their financial results for the third quarter of the current fiscal.

Positive news

Meanwhile, the flow of positive news on other fronts for a few frontline stocks also added to the tempo pushing up the sentiment in the market.

One of these was the announcement by ONGC regarding its discovery of natural gas in the KG Basin off the Andhra Pradesh coast and at the Mahanadi Basin off the Orissa Coast. The stock spurted by over two per cent to Rs. 915.

Biocon, NIIT

Amongst the stocks that spurted after reacting to the company's good results announcement on Thursday were Biocon and NIIT Technologies.

Biocon had announced a growth in revenues of about 23 per cent and a bottomline growth of 27 per cent during the quarter ended December 2006, compared to the corresponding period of the previous year. The stock spurted by 20 per cent intraday, but finally closed the day with a gain of ten per cent at Rs 410.

The NIIT Technologies stock also rode the wave of investment buying after the company announced its Q3 results.

On Thursday, the stock gained over 20 per cent to close at Rs 410.

While the Reliance Industries stock was up marginally on the back of results expectations, Reliance Energy and Reliance Communications were down marginally as at the close of the day.