The Hindu Business Line : Markets bounce back with more broad-based buying

The bulls put up a strong resistance act on Tuesday, to ensure that the markets closed on a positive note. The markets, however, did not come back with full optimism, as they remained jittery over the impact of RBI's interest rate hikes. The Sensex did decline below the 12,500-level to reach its intra-day low before making a comeback. The buying was not restricted to the heavyweights and appeared more broad-based. This was reflected in the advancing stocks outnumbering the declines by a ratio of 1.4:1.

Among the sector indices, IT and public sector indices at the BSE remained active and gained over 2 per cent. Banking and pharma stocks remained relatively subdued although they closed with some gains.

Buzzing stocks

In the heavyweight category, Bharat Heavy Electricals and NTPC stole the show as the stocks surged over 4.5 per cent. The former rose after it announced a 42 per cent increase in its provisional net profits for the year-ended March 2007 over profits of the financial year 2006. The company also plans to spend Rs 3,200 crore to expand capacity. The stock added Rs 100 to close at Rs 2,254.

Among the mid and small-cap segments, stocks such as Nirlon and Oriental Hotels hit their upper circuit filters and remained there at close. Others such as IFCI, Steel Authority of India, Sakthi Sugars, IVRCL Infrastructures and Balrampur Chini Mills rose on the back higher volumes.

Sector focus

The BSE IT index registered smart gains with frontline stocks such as Infosys, Satyam Computer Services and Wipro gaining in the range of 2-3 per cent. HCL Technologies, Tata Consultancy Services and Mastek inched northwards.

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Infrastructure and real estate companies continued to be haunted by various not so positive budget proposals such as the removal of Section 80IA for projects of mere contractual nature and SEBI's impending regulations on new listing of real estate plays. Arihant Foundation, Ansal Properties & Infrastructure, Peninsula Land and Unitech witnessed extreme selling pressure. Infrastructure stocks such as Simplex Infrastructure and Atlanta also remained weak.

Auto stocks witnessed fresh buying momentum. Hero Honda and Maruti Udyog closed in the positive. Mahindra & Mahindra added about 2 per cent. The company along with Renault unveiled its Logan sedan.

Stock-specific action

Orchid Chemicals & Pharmaceuticals plans to enter the Canadian generic formulations market after it received approvals for the same. The stock, however, remained subdued and added only 0.4 per cent to Rs 255.7.

Tata Motors gained Rs 11.8 to Rs 681.1. The company's sales for March rose by 11 per cent after it witnessed record demand in India for commercial vehicles.

The USchocolate and confectionery maker Hershey has entered into a joint venture with Godrej Foods and Beverages, a group company of Godrej industries to establish Hershey brand across India. Godrej Industries made marginal gains of 1.5 per cent.

Prime Securities, Dredging Corporation TV18 India, PVR and Bank of India were significant gainers at the NSE. Abhishek Mills, Rana Sugars, BAG Films, Kamat Hotels and Lanco Infratech were conspicuous losers.