The Hindu Business Line : Markets surge ahead on all-round buying

Heavy institutional buying support for stocks from out of every major sector helped the stock markets post a strong, over two per cent rise, on Monday. With the slow rise of the last few sessions and this jump on the first trading of this week, the massive down slide witnessed on the Manic Monday of last week has been more than made up.

The markets had crashed by nearly five per cent last Monday after the CRR hike was announced by the Reserve Bank of India. After the latest 2.5 per cent rise, the indices have gained by over five per cent, from the lows of last week.

This Monday's gains don't seem to have been triggered by any particular development. On the contrary, it just appeared to be a bounce back, since most of the negative news had all been already factored in. In fact, the smart rise in the indices on Monday was despite a few global investment gurus proffering a word of caution to foreign institutional investors who are planning to pump up further funds into the Indian market.

Monday's gainers came from a broad swathe of sectors including automobile, banking, information technology, metals and FMCG. It was also not restricted to the top-rung stocks, but was evident in the surge in prices amongst small-cap and mid-cap stocks. At the BSE, the Sensex opened strongly at 12,905 and climbed up all the way during the trading session on Monday to close at 13,178 , a gain of exactly 2.5 per cent.

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There was just one stock from the Sensex 30 that closed the day in the red, the rest were all basking in positive territory. The only loser Bajaj Auto had slipped marginally by about 0.5 per cent at Rs 2,297.

The scenario was similar at the National Stock Exchange, where the S&P CNX Nifty Index was up by a shade over 91 points, closing Monday's session at 3,844. The top five gainers from the Nifty were Tata Steel, Reliance Communications, ITC, Grasim and Maruti Udyog. There were six stocks that were in the red from the Nifty fifty, including Dabur India, Zee Entertainment Enterprises, National Aluminium, Bajaj Auto and GAIL.

Sector stocks that had taken a beating last week were all clearly coming back into the radar of bulls. With prices that were very close to their interim support levels, there were a number of stocks from sectors such as automobiles, banking, metals and information technology that must have seemed to be bargains for investors looking to buy at the current levels in the market.

Except for Bajaj, most of the other automobile stocks witnessed considerable buying support and managed to post gains. These included Maruti Udyog, up 4.6 per cent, Tata Motors, up 2.5 per cent, Hero Honda, up 1.1 per cent, and Mahindra & Mahindra, up 2.9 per cent.

The group of stocks with the most gains on Monday's session came from the banking sector. Banking stocks recovery looked, possibly, more like an after-thought about whether last week's bear hammering was overdone. The banking stocks that were in the black included SBI, HDFC Bank, Dhanalakshmi Bank, Punjab National Bank, ICICI Bank, UTI Bank and Kotak Mahindra Bank.

Select stocks from the software, engineering, metals, oil & gas, telecom and PSU sectors also posted gains. However, after reaping sweet returns from them last week, institutional investors dumped sugar stocks on Monday and a number of the counters were in the red.