The Hindu Business Line : Mid, small-cap indices outperform Sensex

Markets opened lower on Wednesday morning in tandem with the rest of Asia. But a post-lunch surge caused by short covering in the derivative segment ensured that the markets closed on a strong note. The Sensex gained 81 points and the Nifty ended the day at 4167.30, up 0.62 per cent. The BSE Midcap and Smallcap indices outperformed the Sensex, closing higher by 1 per cent. Market breadth was better than Tuesday and the advance decline ratio stood at 1.5:1.

Sector Specific Moves

Among the sectoral indices, FMCGs finished at the top followed by healthcare, oil and gas, auto and Bankex.

In the FMCG space, the Tata Tea stock recorded its biggest move in recent years, surging by 15 per cent, after reports suggested that Nestle SA at the global level was actively pursuing takeover talks for the vitamin water brand-Glaceau owned by Energy Brands. Tata Tea had in August last year acquired a 30 per cent stake in the latter at a consideration of $667 million. The Tata Coffee stock also moved up in sympathy, rising by Rs 30 over the day.

Godrej Consumer Products bucked the trend in the FMCG sector by closing 13 per cent lower. The stock was reacting to its numbers, which were not in line with market expectations. ITC, Marico and Nestle were the other stocks that closed with a gain in this segment.

The healthcare index was up 1.72 per cent with Ranbaxy Laboratories at the helm. Ranbaxy had earlier received the US Food and Drug Administration's approval to sell a generic version of Pravachol, a cholestrol drug. The other stocks that clocked significant gains were Cipla, Matrix Labs and Orchid Chemicals.

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Reports suggesting that India may raise gasoline and diesel prices by two rupees a litre in May led to a rise in the prices of Bharat Petroleum, Hindustan Petroleum and Indian Oil Corporation. Reliance Natural Resources and Reliance Petroleum also saw a huge increase in volumes.

Auto and banking stocks headed northward for the second day today. Bank of Baroda, Canara Bank, HDFC, ICICI and SBI were the prime movers.

There was no respite for the IT stocks as they slipped further down influenced by the rupee's new nine-year high against the dollar. The Patni, Infosys, Satyam and TCS shares bore the brunt.

Stock Specific Action

Citing a slump in the prices of alumina due to rising output from China, National Aluminium Company reported a decline in profit for the first time in 17 quarters. The stock, however, was up 2 per cent.

Shares of Jubilant Organosys rose after it acquired Hollister-Stier Laboratories LLC, a US-based contract drug maker, for $122.5 million.

Maharashtra Seamless fell 2.5 per cent on a day when its Q4 profits rose 26 per cent due to higher sales volumes. The stock had gained over 10 per cent in the last few days.

Shares of Gremach Infrastructure Equipments and Projects gained Rs 14 after it announced that it has acquired 200 acres of land in Maharashtra for expansion and diversification.