The Hindu Business Line : ‘Safe’ stocks end on a positive note

Mumbai, June 9 Even as the Bombay Stock Exchange Sensex breached the psychological 15,000 levels intra-day on Monday, there were select stocks that gained on buying support.

While all other indices fell, BSE Health Care index ended the day on a positive note as select pharma stocks saw some defensive buying.

Ranbaxy Laboratories was up Rs 19.6 or 3.87 per cent from its previous close, Sun Pharma gained by 2.72 per cent, Lupin rose by Rs 52.25 or 8.05 per cent and Nicholas Piramal was up 2.89 per cent.

“Select stocks witnessed buying today as they are the safest stocks at the moment and are not affected by inflation or even the rising crude oil price. And also the Budget this year was positive for the health care sector,” said Mr Sanjay Someshwar from Ventura Securities.

One of the three Sensex stocks that gained on Monday was Reliance Communications. The stock closed up 1.34 per cent or Rs 1.34 from its previous close at Rs 554.10. The scrip that was trading in the red till around two in the afternoon, touched a low of Rs 507.90 and a high of Rs 564.80.

“It looks like the deal with South African telecom company MTN will be finalised soon. And there are talks of a reverse merger, where MTN might takeover Reliance Communications. With this Reliance Communications can benefit from the bigger customer base of MTN and other such benefits,” said an analyst with a stock broking firm.

The other two Sensex stocks that ended positive were Ranbaxy and Hindalco.

Reliance Petroleum too ended the day positive. It was up Rs 4.90 or 2.94 per cent from the previous day’s close. Market men say that the stock was up due to the RIL Chairman’s comments on the company’s Jamnagar refinery — Mr Mukesh Ambani said that the refinery would be completed before December and analysts say that the long term outlook for the stock is positive.

Benefiting from the rising price of crude oil was Cairn India. The stock was up Rs 52.25 or 8.05 per cent on Monday.

“The higher the price of crude, the more it will benefit Cairn India. The company has its own oil fields in Rajasthan. With the dollar also becoming strong, it will again directly benefit the company,” explained Mr Someshwar.

Minerals shine

Mineral stocks such as Sesa Goa and Gujarat Mineral Development too ended the day above its previous close. “There are talks that the export duty on minerals is unlikely to be imposed and that might be the reason why there was buying at these counters,” said Mr Anita Gandhi, Head of Institutional Business, Arihant Capital Markets Ltd.

Sesa Goa saw did see quite a bit of correction from its high of Rs 4,400 in March and is now trading at around Rs 3,500, which is a very attractive level. This could be the reason the share went up, added a minerals analyst with a brokerage.

Two-wheeler major Hero Honda was up Rs 13.85 or 4.84 per cent and ended the day at Rs 769.60.

“Hero Honda did not move as much as the other auto sector scrips in the last one week. So what could be happening is that investors might be selling those auto scrips that had a huge run up and diverting their funds in Hero Honda stocks. And also the company did have good sales figures for May,” said Ms Gandhi. The company posted a 9.5 per cent increase in its sales of motorcycles and scooters.

The stock of Andrew Yule and Company was locked at the upper limit of 20 per cent at Rs 42.50 by the after noon . The share price of the company went up by Rs 7.05 on reports that the company had received the go-ahead for its disinvestment plans in three of its associate companies.

Other stocks that ended the day in positive were Tata Power, GTL Infrastructure, Spice Communications and National Aluminium Company.

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