The Hindu Business Line : Positive sentiment takes Sensex past 14,000

It was business as usual at the country's stock exchanges on Tuesday. The volatility and hesitant, but eventually upward movement of the indices, which has been the feature of the past few months were all present on a day when the indices crested new highs.

The NSE's S&P CNX Nifty index had its rendezvous on Monday with another milestone - the 4,000-points mark. On the other hand, the BSE's benchmark Sensex has been inexorably pulled towards the next signpost - the 14,000-points mark - for the past few days.

But, it never quite managed to conquer that level during the past few sessions, due to nervousness setting in towards the close of each of these previous trading sessions.

General market trend

On Tuesday, however, the prevailing positive sentiment took the Sensex well past 14,000 right at the open of the session.

For market players it seemed that the summit at 14,028 points was a fleeting moment and gave them too heady a feeling.

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Posting a strong 164-point rally right at the beginning of the session was unsustainable for the Sensex.

The inevitable profit booking set in quickly, as a bit of understandable nervousness egged investors to offload. The Sensex then went on to fall to an intra-day low of 13,906 points.

Intermittent buying support and selling pressure meant that both the benchmark indices recorded another day of volatility. Though the 14,000-points mark was never again crossed, selling pressure also did not reach a point of strength leading to a late-afternoon slide in the Sensex.

Stock-specific action

Much of the action on Tuesday was centred around the index heavyweights and to some extent in the small-cap stocks.

The fact that the market was turning distinctly cautious at the higher levels was also amply evident from the 3:2 ratio in favour of stocks that were in the red compared to those that had posted gains intra-day.

Four stocks that helped pull up the Sensex on Tuesday were Tata Steel, Reliance Communication, L&T and Infosys. Among the big losers that proved a drag on the Sensex were Gujarat Ambuja, HDFC, HDFC Bank, Grasim, Maruti, Bajaj Auto and ICICI Bank.

Tata Steel was in the limelight on Tuesday with a gain of 5.3 per cent partly due to the return of buying support for metal stocks and also due to rumours about the possibility of the company tying up with a prominent Japanese shipping line for a potential new transportation joint venture.

L&T also found favour among investors for a few of its recent acquisitions and contracts. The stock closed with a gain of 2.8 per cent at Rs 1,462.25 on the BSE.

Reliance Communications gained on the back of rumours that the company is bidding for overseas contracts and is planning a huge expansion of its telecom network within the country.

Among the other sectors that were seen being favoured by institutional investors were oil and gas, metals, IT and capital goods. The heated rebound in sugar stocks during the previous session was diluted on Tuesday.