Bargain hunting to the fore

STOCKS REPORT

Bargain buying in blue chips, especially in banking counters, helped the market record gains. The benchmark Bombay Stock Exchange (BSE) Sensex closed higher as investors turned buyers at lower levels in blue chips and select midcaps after five straight days of correction.

Buying was seen in banking, capital goods, FMCG and metal counters, which were among the biggest gainers on Tuesday but volumes were subdued.

Select consumer durables counters recorded some loses on the day. In the BSE Sensex basket, 22 out of the 30 scrips closed higher.

The breadth of the market remained negative, with losers outpacing gainers 13:11 on the BSE.

Players said that the current month futures contracts expiry this week and Union Budget on 28 February are causing investors to shift positions in the futures segment, leading to the uncertainty and volatility seen in recent times.

"The gains seen on Tuesday were mainly because of bargain hunting at lower levels, "a dealer from a local brokerage said. News of the autonomy package fired up PSU Bank stocks and with it the Sensex, he added.

The BSE Sensex hit a high of 6603.14 and a low of 6515.73 in intra day trades before closing at 6589.41, up 54.73 points (0.84 per cent) from Monday's close. Volumes were marginally higher than on Monday in the cash segment of the bourses; the BSE reported a turnover of Rs 1856.59 crore and the NSE reported a turnover of Rs 3938.17 crore.

L&T was the biggest gainer in the Sensex basket, rising 4.68 per cent to Rs 1067.35, followed by SBI, up 3.03 per cent to Rs 680.75, Bajaj Auto gained 2.07 per cent to Rs 1048.95, HLL was up 2 per cent to Rs 145.25 and Reliance Energy gained 1.92 per cent to Rs 558.35.

Ranbaxy Labs was the biggest loser in the Sensex basket, falling 1.25 per cent to close at Rs 1013.10, HPCL was down 1.11 per cent to Rs 347.85, Hindalco fell 0.70 per cent to Rs 1358, Hero Honda was down 0.47 per cent to Rs 539.75 and ICICI Bank was down 0.32 per cent to Rs 374.75.

Strong buying support from foreign funds has helped the market record a big rally but the undertone of the market is cautious as a lack of active domestic participation has raised concerns, market players said.

Foreign institutional investors were net buyers of Indian shares worth Rs 210.80 crore on Monday as per data from the Securities and Exchange Board of India website.