The Hindu Business Line : Markets recover from aftershocks on value buying

Notwithstanding the general disappointment over the Union Budget, markets seemed to have recovered from its after shocks, a day after the B-day. Both the bellwether indices put up smart gains, with the Sensex gaining close to 221 points and the Nifty closing with a 1.76 per cent gain. Mixed cues from global markets failed to deter the investors' spirits, who sought to value buying and bottom fishing. In addition to this, the spurt in the markets could also be attributed to buying by institutions and mutual funds. However, the market breadth remained neutral, with the advance-decline ratio pegged at about 1:1.

New listing

Indian Bank had a debut listing on Thursday, attracting a listing gain of about 15 per cent. The stock listed at Rs 105 as against its issue price of Rs 91 in the BSE, on the back of high volumes.

Buzzing stocks

Neyveli Lignite appreciated by about 6.4 per cent after the Budget raised the total outlay for the company to Rs 2,007 crore from Rs 945 crore in 2006-07. The cut in the excise duty of tobacco-free pan masala rubbed off positively on Kothari Products, which clocked gains of about 3.5 per cent. Sesa Goa, on the other hand, continued to move southwards on the back of Government's plan to levy a tax on overseas sales of the steel making ingredient, which is likely to lower the company's profit. The stock closed with a loss of about 7.5 per cent.

Sector focus

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After ending deep in the red on the previous trading session, IT stocks staged a solid comeback on Thursday.

The realisation that the increased tax burden is likely to have little impact on the earnings' could be attributed to the day's spurt. Stocks such as Satyam Computer and Wipro gained over 5 per cent each while Infosys Technologies gained about 3.6 per cent.

TCS, which does not have any employee stock option plan put up gains of about 5.65 per cent. Other stocks that gained in this space were HCL Technologies, MphasiS and Patni Computers.

Cement stocks, extending their previous day's fall, continued to fare badly. The proposed differential duty structure for cement on the basis of its retail price has led to the fall in the process of cement scrips.

Further, the down gradation of the sector by Merrill Lynch & Co. could also be linked to the day's fall.

Among stocks that closed in the red were Gujarat Ambuja, ACC and Grasim Industries.

The Union Budget, considered positive for the banking stocks certainly seemed to have rubbed off positively on the sector. The BSE Bankex gained by about 2.75 per cent during the day. Among stocks that gained in the sector were UTI Bank, HDFC Bank, PNB, ICICI Bank and Bank of India.

Auto stocks were a mixed bag. Maruti Udyog, after reporting a 53 per cent increase in the monthly sales on a year-on-year basis, ended with a measly gain of 0.11 per cent. Bajaj Auto, on the other hand, declined by about 4 per cent on reporting a 2 per cent decrease in sales for month of February.