The Hindu Business Line : Sentiment high; short covering also aids rally

The US Federal Reserves' decision to not increase the interest rates coupled with an indication towards future reduction in rates brought some respite to the Indian markets, which struck a three-week high on Thursday. Sentiments in Dalal Street were on a high, buoyed by a rally across major world indices. Further, short covering in the market also contributed to the day's relentless rally. While the sensitive index spurted to record a 362 points gain during the day, the broader index, Nifty, ended the day with a whopping 3 per cent gain. Mirroring the bullish sentiments in the market, the advance - decline ratio was pegged at 1.7:1.

Buzzing stocks

VSNL appreciated by about 10.25 per cent on news report that the Government may ask the Tata Group firm to sell its surplus land bank of 773 acres. The report estimated that the sale could fetch as much as Rs 10,000 crore. Bank of India, which has recently set up operations in Belgium, gained 12.6 per cent on the back of fresh buying interest. Among other stocks that moved northwards were Tata Chemicals, Hinduja TMT, Mid-Day Multimedia, Magma Leasing and Vimal Oil Foods. Bucking the general market trend, stocks such as Container Corp, Britania, Orchid Chemicals and GHCL ended in red.

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Wartsila Industries, Sujana Metal, Idea Cellular and ENT Network were among stocks that hit a new high on Thursday.

Sector focus

Buying in large cap stocks supported the day's rally, with stocks such as HDFC Bank, Maruti Udyog, ONGC and State Bank of India leading the gainers pack. Other players such as L&T, Hero Honda, Reliance Communication and Tata Motors also contributed to the rally, chipping in about 3 per cent gains each. Reliance Industries, after it signed an agreement with the US-based Rohm & Haas Co, to build a chemical plant in Gujarat clocked in gains of about 2.55 per cent. BHEL, on the other hand, gained on speculation that it may win an order from ONGC to supply equipment for oilrigs. All but one stock in the large cap space ended in positive terrain. The only stock that moved southward was Grasim Industries, which lost about 1.2 per cent.

Banking stocks were in demand during the day. The 4.3 per cent rise in BSE Bankex substantiated the same. Short covering in bank stocks and value buying could be attributed to the sudden spurt in the sector. Some of the stocks that gained in this space were Canara Bank, Punjab National Bank, UTI Bank and ICICI Bank. Kotak Mahindra Bank gained by about 2 per cent after it signed a deal with International Finance Corporation (IFC) to raise up to $45 million (approx Rs 202 crore) in Tier II subordinated bonds with a maturity of more than 15 years.

Stock-specific action

Punj Lloyd gained 1.68 per cent after its consortium secured an order worth Rs 242 crore-pipeline order from ONGC. In another event, it has also won an order worth Rs 258 to expand the fuel supply system at New Doha International Airport in Qatar.

McNally Bharat Engineering Company has secured an order worth Rs 20.95 crore for supply of equipment from National Aluminium. The stock closed with a 2.5 per cent gain.