20th April 2005, 07:51 PM
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Stocks end 3-day losing streak
Stocks end 3-day losing streak! Wonder how long will it last??
Quote:
Indian shares snapped a three-day losing streak on Wednesday and pulled away from near three-month lows on gains in automotive, energy and metal stocks but investors were thin on the ground after recent steep losses.
The benchmark 30-share Bombay index closed 1.77 percent higher at 6,243.74 points, although losers outnumbered winners 1,098 to 948 in volumes of more than 146 million shares.
The broader 50-share National index was up 1.06 percent at 1,929.70 points.
"There has been some buying because of the relatively low prices but I think it is mostly shortcovering. Investor interest is still wanting," said R. Parthasarathy, chief dealer at IDBI Capital Market Services Ltd.
The benchmark Bombay index has lost more than 10 percent over the past six weeks after recording its all-time peak of 6,954.86 points on March 9, shaving more than 9 percent off its market capitalisation.
Investor interest cooled after the index rose by 25 percent in less than half a year to the March 9 peak, spawning concerns the market may have become slightly expensive.
The index hit a succession of near-three-month lows over the past three sessions, raising hopes that valuations were more attractive, but the absence of investors has left sentiment wary.
Traders said the bulk of Wednesday's purchases could be on account of traders covering in the cash market exposures generated in the futures market.
Big gains in index heavyweights such as Reliance Industries Ltd. and Oil and Natural Gas Corp. Ltd., helped lift the index.
Reliance, India's leading petrochemicals maker, closed 3.13 percent higher at 530.20 rupees on news the U.S. International Trade Commission had rejected a dumping claim on polyethylene terephthalate exports from India, Indonesia and Thailand.
Reliance has a 10.97 percent weighting in the Bombay index.
ONGC -- which has a 4.94 percent share in the index -- saw its shares rise 1.8 percent to 855.60 rupees.
Chairman Subir Raha said on Tuesday ONGC's consolidated net profit for the year to March 2005 was 125 billion rupees, which was more than 33 percent higher than the previous year.
Automotive shares, which had been beaten down in the past month, made strong gains on Wednesday.
Hero Honda Motors Ltd., the country's largest motorcycle maker, rose 5.77 percent to 515 rupees.
Maruti Udyog Ltd., the country's largest car maker, rose 3.89 percent to 429.15 rupees.
Also up was Tata Iron and Steel Co. Ltd., which had been pounded over the past six weeks on concerns world steel prices were peaking. The stock closed 4.74 percent higher at 363.40 rupees.
Gujarat Ambuja Cements Ltd. gained as news of a bonus and stock split offset disappointment over a drop in third quarter profits. The stock rose 1.35 percent to 423.85 rupees. Losers included Tata Consultancy Services Ltd., whose earnings on Tuesday disappointed the market. Its shares fell 7.78 percent to 1,115.65 rupees. Investors are already wary of technology stocks, which are seen as too expensive.
TCS trades at a forward price-earnings multiple of 14, while Reliance Industries trades at 9.5.
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