The Hindu Business Line : Auto ancillary & tyre stocks on a roll

THE markets performed a volte-face ending the downward spiral registered over the previous three sessions. Aided by a strong advances decline ratio of 4:1 in favour of the gainers a majority of the sector-oriented indices registered gains. The markets were back on track with the mid-cap and small-cap stocks registering smart gains.

The BSE Sensex opened 20 points higher than Tuesday's close. The index, which registered hiccups in the morning session, staged a smart rally northwards towards close. The Sensex closed with a gain of 134.3 points recovering a large part of the losses registered in the two previous trading sessions.

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The S&P CNX Nifty, which opened on a strong note, moved within a narrow band for most part of the day. However, it gathered momentum in the post-lunch session. There appeared to be no stopping on its journey to the day's close of 2360.15 points. The Nifty registered a gain of 1.79 per cent.

A strong bullish trend prevailed in the metal, IT, banking and consumer durables sectors. Prominent gainers in the metal space were steel stocks — Jindal Steel, Maharashtra Seamless, Ispat Industries, Mahindra Ugine, and Essar Steel and non-ferrous stocks National Aluminium and Hindalco. A majority of stock in the banking sector registered smart gains; leading the pack were South Indian Bank, Federal Bank, Syndicate Bank, Indian Overseas Bank and Punjab National Bank all of which gained more than three per cent.

Investors were on a buying spree, reacting to reports that LML expects to report a profit in the fourth quarter in FY-06 in more than three years, pushing the stock up six per cent to Rs 48.7. Close to six lakh shares changed hands on the BSE. The other gainers in the two-wheeler space were Hero Honda and TVS Motor. Baja Auto was the odd one declining by 1.65 per cent to close at Rs 1411.7.

In the auto-ancillary segment, Munjal Showa, Sundram Fastners, NRB Bearing, SKF Bearings, Amara Raja, Rico Auto were up more than two per cent. Munjal Auto secured most of the attention in this segment with the stock registering a sharp jump in volumes. A 27-fold jump in volumes skyrocketed the stock to close with a 20 per cent gain. Reports of de-merger of its forgings business appear to have fuelled interest in the stock.

Tyre stocks supported by the rally in the auto sector were up. Ceat, Goodyear and Apollo Tyres were up more than two per cent. Volumes almost doubled on the MRF counter, which hit the upper circuit filter in the afternoon session registering a sharp gain of 10 per cent.

A more than two-fold jump in volumes on the Escorts counter of 30 lakh shares supported the upward rally in the stock, which had in the last month been languishing in the Rs 95-Rs 105 band. It closed with a sharp gain of 12 per cent.

Reports of buy out by parent Ingersoll-Rand of the public holding in its subsidiary Ingersoll-Rand India propelled the stock to close with a gain of 20 per cent hitting the circuit filter. It closed Rs 14 higher the price at which the buy-out is expected to take place.

EIH gained 2.8 per cent on reports that it plans to merge some of its subsidiaries with the objective of increasing the promoters stake beyond the 50-per cent mark. The other gainers in the hospitality industry were Indian Hotels and Asian Hotels. Taj GVK Hotel recorded a marginal dip of 0.3 per cent.

Fuelled by plans of doubling its capacity, Mawana Sugars gained sharply by 12 per cent. Volumes jumped three-fold on the counter.

Significant gainers among the Nifty constituents were Satyam Computers, SAIL, Bharti Tele-Ventures, SBI, HPCL and Dabur.

Prominent losers on the Nifty were Maruti, Gujarat Ambuja Cement, ONGC and L&T.

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