Bottom fishing stems slide

STOCKS REPORT

Bargain buying at lower levels helped shares recover on Friday after recording losses for three days on the trot.

After some brief declines in the initial part of the trading session, the Bombay Stock Exchange's (BSE) 30-share Sensex closed marginally higher than the Thursday's close as investors took to bottom fishing.

Moving in a range of 93 points, the stock market bellwether hit a high of 6,440.31 and a low of 6,347.50 in intraday trades. It finally settled at 6,420.46, up 53.07 points, or 0.83 per cent, from Thursday's close.

Trading volumes on the cash segments of the bourses were lower than on Thursday; the BSE reported a turnover of Rs 2,224.02 crore and the NSE Rs 4,947.34 crore.

The decline in shares in initial trades was due to the lingering worries over the impact of a hike in US interest rates on foreign fund inflows.

Moreover, Wednesday's slide in global metal prices on apprehensions of a slowdown in Chinese demand weighed down the sentiment. But metal shares staged a smart rebound, with investors looking for value deals at lower levels.

Market sources said Friday's recovery was due to the sustained hopes of strong economic fundamentals, even as players have been booking profits and also unwinding overbought positions in the last three sessions.

A dealer with a local brokerage said, "It was the first weekly decline in three weeks and we will see some consolidation during the earnings season, with the next big trigger being the Union Budget next month."

Many a brokers feels that the market is expected to be rangebound in the near term.

Shares in oil, consumer durables, capital goods and metal firms were the gainers on Friday.

The breadth of the market was positive with gainers outnumbering losers by 9-to-4. In the Sensex basket, 17 out of the 30 stocks closed higher. Cement shares climbed on hopes of price hikes next week, due to a strong demand from the construction sector. Investors bought metal scrips, which were hammered down in the last two sessions, at lower levels.

Foreign funds were net sellers of domestic equities worth Rs 31.80 crore on Thursday, while mutual funds were net buyers to the tune of Rs 4.90 crore, data from the Securities and Exchange Board of India show.

Larsen & Toubro was the biggest gainer in the Sensex portfolio, gaining 3.55 per cent to close at Rs 972.45. Reliance Industries, another index heavyweight, rose 2.83 per cent to end at Rs 540.85, Gujrat Ambuja Cement gained 2.46 per cent to close at Rs 426.30, Satyam Computer Services was up 2.30 per cent at Rs 387.30 and Bajaj Auto was up 2.19 per cent at Rs 1,094.60. Reliance Industries shares rose ahead of an expected share buyback next week, brokers said.

Zee Telefilms was the biggest loser in the sensex basket, falling 3.50 per cent to Rs 162.90, followed by Reliance Energy, down 3.15 per cent at Rs 528.05, Tata Power, down 1.86 per cent at Rs 368.90, and HDFC, down 1.54 per cent at Rs 726.85, and Cipla, down 0.65 per cent at Rs 291.60.