Sensex Nifty close at 6 month high

Sensex Nifty close at 6 month high

Strong gains in blue chips lifted the market to over a six-month high on Wednesday on hopes of President George W Bush's second term in the White House. While stocks rose across the board, tech stocks led the gains on the feeling that the re-election of Bush will be good for the Indian tech sector. Recording its third straight rise, the 30-share BSE Sensitive index (Sensex) ended with a massive gain of 87.78 points, or 1.53%, at 5,842.54, its best close since 27 April 2004.

The benchmark index, which has gained 177.27 points in the last three sessions, has recovered by 284.40 points from its recent low of 5,558.14 touched on 26 October.

The NSE S & P CNX Nifty index gained 23.70 points, or 1.31%, to end at 1,837.40.

The rise on the market came with rising activity. Volumes on the bourses improved, with shares worth Rs 1,782.12 crore being traded on BSE today, compared to Rs 1,537.70 crore on Tuesday and Rs 1,414.98 crore on Monday.

Tech stocks displayed strength. The BSE IT Sector index gained 63.62 points, or 2.68%, to end at 2,434.97.

Frontline tech stocks Satyam Computer (up 4.58% to Rs 390.80), Infosys Technologies (up 2.70% to Rs 1,961.65), Wipro (up 2.26% to Rs 675) and TCS (up 1.58% to Rs 1,176.95) firmed up on sustained buying interest on hopes of a victory for Bush.

Other tech stocks Geodesic Info (up 7.80% to Rs 549.90), Infotech Enterprises (up 4.85% to Rs 168.65), MphasiS BFL (up 3.57% to Rs 277) and Tata Infotech (up 2.67% to Rs 421) also gained ground .

Banking stocks also gained smartly. The BSE Bankex surged 92.03 points, or 3.32%, to end at 2,867.89.

PSU banks Bank of Baroda (up 7.46% to Rs 169.30), Bank of India (up 7.38% to Rs 60.35), Union Bank of India (up 6.16% to Rs 78.40) and State Bank of India (up 3.88% to Rs 487.65) spurted on value buying amid hopes of improved offtake and fall in defaults by borrowers.

Federal Bank (up 8.25% to Rs 327.95) gained further ground on sustained buying interest after the bank announced 30 November 2004 as the record date for bonus issue. Often buying emerges in a stock ahead of the record date for a bonus issue as investors mop up the stock to get bonus shares. Only those shareholders, who have the shares in their name by the record date are entitled to a bonus issue. A liberal bonus issue of 2:1 has been announced by Federal Bank. Over 1.96 lakh Federal Bank shares were traded on BSE today.

Other private sector banks ICICI Bank (up 3.57% to Rs 307.25) and HDFC Bank (up 1.93% to Rs 428.45) also traded higher.

Banking stocks have been rising after the Reserve Bank of India, in its mid-term review of the Monetary Policy on 26 October, kept bank rate used to price medium-to long-term loans unchanged at 6%, the lowest it has been in three decades. This came as a relief to the banking stocks, which had fallen in the recent past amid fears that higher interest rates would drive up bond yields and depress trading profits.

Metals stocks gained momentum towards the close of the session. The BSE Metal index ended 75.65 points, or 1.53%, higher at 5,022.16.

Metal pivotals Tata Steel (up 2.08% to Rs 298.85) and Hindalco (up 1.37% to Rs 1,241.95) rose amid receding fears of a slowdown in Chinese demand.

Bhushan Steel & Strips (up 9.45% Rs 138.45) firmed up on sustained buying on reports that the company plans to notch up an export turnover of Rs 800 crore in FY 2004-05, a growth of over 100% over Rs 389 crore in FY 2003-04. The company has already posted exports of over Rs 341 crore in the first half of FY 2004-05, up from around Rs 149 crore in the corresponding in period in FY 2003-04.

Ispat Industries (up 7.42% to Rs 13.75) firmed up on hopes of improved performance of the company in the coming quarters after achieving a turnaround in SQ 2004. Ispat topped volumes on BSE, with over 77.75 lakh shares traded today.

Grasim (up 1.90% to Rs 1,145.20) moved up on selective buying interest after the company reported a 11.34% rise in October 2004 cement / clinker despatches to 1.15 million tonnes.

ITC (up 0.94% to Rs 1,135.60), ONGC (up 1.31% to Rs 799.20), Hindustan Lever (up 0.23% to Rs 128.30) and Reliance Industries (up 0.15% to Rs 543.65) also contributed to the gains of the Sensex.

Action was also seen in pharma stocks. The BSE Healthcare index gained 28.53 points, or 1.08%, to end at 2,669.07.

Pharma stocks like Glenmark Pharma (up 10% to Rs 339.95), Panacea Biotec (up 10% to Rs 129.95), Alembic (up 9.33% to Rs 245.60), Elder Pharma (up 8.21% to Rs 166.70) and Gufic BioScince (up 7.33% to Rs 41.75) traded firm on the back of strong quarterly results.

Yet, Cipla slipped from Rs 281.90 to Rs 274.60 before settling at Rs 276.90, down 0.73% from its previous close.

MNC Pharma stocks Pharmacia Healthcare (up 9.60% to Rs 113), Pfizer (up 5.90% to Rs 575), Wyeth (up 5.45% to Rs 531.50) and GlaxoSmithKline Pharma (up 4.71% to Rs 751.50) gained further ground.

There has been a sustained rise in Pharma MNC stocks since the last few months. According to market men, with the product patent regime fast approaching (1 January 2005), the market 's interest in shares of pharma MNCs is gaining in strength. In line with its trade-related commitments to WTO, India is bound to abide by the TRIPS and recognise product patent. Accordingly, the product patent regime will be effective from 1 January 2005 in India.

Automobile stocks witnessed weakness in an otherwise firm market. The BSE Auto index ended 1.21 points lower at 2,378.76.

Automobile pivotals Maruti Udyog (down 0.41% to Rs 378.20), Bajaj Auto (down 0.14% to Rs 981.90) and Hero Honda Motor (down 0.08% to Rs 429.05) ended lower on selling pressure on fresh rise in the oil price after prospects of Bushs victory rose.

Eicher Motors (up 2.45% to Rs 228.15) traded steady yet off its days high of Rs 231 on selective buying interest after the company said it sold 1,887 vehicles in October, up 69.8% from 1,111 units in October 2003. Sales in April-October 2004, the first seven months of FY 2004-05, were up 47% to 10,778 units from 7,343 units in the year-ago period.

The BSE 500-index gained 32.05 points, or 1.36%, to end at 2,387.79.

United Breweries (Rs 213.50) was frozen at the 20% upper limit of the circuit breaker for the second straight session on hopes of improved SQ 2004 results. From 100 touched on 7 October, the United Breweries stock has risen 113.50% on sustained buying. Over 20,000 UB shares were traded.

Mirc Electronics (up 9.85% to Rs 22.30) traded firm on sustained buying after the company said that it has clocked its highest-ever monthly colour television (CTV) sales during October 2004. The company will announce its half-yearly results today. Over 4.27 lakh Mirc Electronics shares were traded on BSE today.

Mirc's CTV sales during October 2004 rose 54% at 254,100, in comparison with 164,669 CTVs sold in October 2003. The company also sold 44,681 DVD players during October 2004 as against 3,495 DVD players in October 2003. Meanwhile, washing machine sales grew 33% at 10,766 units in October 2004 as against 8,071 units in October 2003.

Motherson Sumi (up 7.92% to Rs 89.30) gained further ground touching a new high of Rs 93.40 on the back of strong quarterly results. On a stand-alone basis, Mothersons Q2 September 2004 net profit has surged 55% to Rs 18.31 crore from Rs 11.80 crore in Q2 September 2003. Net sales have risen 34.4% to Rs 139.72 crore from Rs 103.92 crore. Domestic sales surged 37% to Rs 114.03 crore from Rs 83.15 crore. Exports rose 23.6% to Rs 25.68 crore from Rs 20.76 crore. Over 3.76 lakh MSSL shares were traded.

Polyplex Corp (up 5.29% to Rs 215.15) traded firm after the company announced strong quarterly results last week. On consolidated basis, for the quarter ended 30 September 2004, the company posted a 82.65% rise in the net profit to Rs 25.06 crore (Rs 13.72 crore) on sales of Rs 143.35 crore (Rs 77.35 crore). The company also declared an interim dividend of 50%, which includes 20% special dividend. Over 2.57 lakh Polyplex shares were traded on BSE today.

The number of shares traded rose to 18.38 crore from 15.84 crore (on Tuesday). While A group accounted for 69.55%, B1 group contributed 25.58% to the total turnover on BSE today.

As many as 329 scrips touched the circuit limits (upper as well as lower) today. Out of these, 295 scrips (26 in B1, 146 in B2, 72 in T and 51 in Z) hit the upper circuit limit and 35 (2 in B1, 19 in B2, 6 in T and 7 in Z) scrips hit lower circuit limit.

The breadth of the market remained positive, with 1,102 gainers and 543 losers. There were 588 gainers in A+B1 group and 514 in B2 group. Among losers, 253 were from A + B1 group and 290 from the B group.

On the NSE, 28.10 crore (22.34 crore) shares worth Rs 4,313.53 crore (Rs 3,440.32 crore) were traded today.

In the derivatives segment of NSE, 283,711 (210,493) contracts worth Rs 9,556.45 crore (Rs 6,841.18 crore) were traded.

The most active futures were the Nifty, Satyam Computer, Infosys Technologies, Tata Steel and Reliance Industries.

The Nifty put-call ratio jumped by 15% to cross one with put options adding nearly five lakh shares. Put options added open interest in 1800 and 1840 strikes. Nifty futures lost four lakh shares in open interest.

Banking stocks rose smartly and added huge open positions. Union Bank, Canara Bank and ICICI Bank added over 15% each in open interest. However Punjab, Bank of India and HDFC Bank lost nearly 16% each in open positions.

Among other counters Cipla added 22%, MTNL added 15% and BPCL and ONGC added 9% each in open interest.

Satyam shed 13 lakh shares in open interest due to short covering and unwinding of arbitrage positions as the stock went ex-dividend. Arvind Mills, Gail India and Bhel also shed open interest.

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