Easing oil price lifts sentiments

STOCK REPORT

Key indices vaulted 3 per cent on Monday, the largest single day rise in over 16 months. Dealers said that domestic investors bought afresh, encouraged by sustained foreign fund purchases and easing of global crude oil prices. However, they expect volatility over the next couple of sessions ahead of the September derivatives contracts expiry on Thursday.

Today's rise is the biggest, both in absolute as well as percentage terms, since May 18, 2004, when they had risen around 8 per cent.

The Bombay Stock Exchange's 30-share Sensex ended at 8478.91, up 256.32 points or 3.1 per cent over Friday, after touching a high of 8487.36. The National Stock Exchange's 50-share Nifty rose 79.60 points or 3.2 per cent to close at 2557.35, after hitting a high of 2560.85.

Midcap stocks, which had come under pressure last week following increased surveillance and regulatory restrictions, performed in line with frontliners.

The NSE Midcap Index was up 3.1 per cent to 3775.50. The BSE-500 and NSE-500 indices too closed over 3 per cent higher. All the 30 shares in the Sensex and all but one Nifty share ended higher. Equities rose 1 per cent minutes after trading started, and stayed around those levels for the next one hour before inching higher.

"It is difficult to figure out what is happening; market is simply too volatile," said Kaushik Shah, director, Kaushik Shah Securities.

"The talk is that more foreign money is waiting to flow into India. But at this stage, I would prefer to stick to a handful of stocks with a relative safety level than hazard a view on the overall market," he said.

Praveen Mallik, senior vice-president, Rolta Shares and Stocks, believes the government's efforts at calming the market also lifted the market sentiment. "In the mid-cap, fundamentally good stocks, which were battered in the last few sessions rose on value buying," he said.

Mallik pointed out that while the frontlines were again close to their all-time highs, the mid-caps were far from that. This month till Thursday, foreign funds have net bought around $963 million worth of equities.

Dabur India led gainers in the Nifty, rising 10 per cent to Rs 165.50. Jet Airways, which became part of the Nifty from today, was the second biggest gainer, climbing over 6 per cent to close above its public issue price of Rs 1,100.

The stock had closed below its issue price in the last couple of sessions. Index heavyweight Reliance Industries rose 5 per cent, while other major gainers included, Satyam Computer Services, Gujarat Ambuja Cements, Mahindra & Mahindra, Indian Petrochemicals Corp., and National Aluminium Co., up between 5-6 per cent.

Oil and Natural Gas Corp. and Hindustan Lever, the other major components of the Nifty, rose 3 per cent each. ABB was the only loser, closing marginally lower.

On the BSE, 73 per cent of the total traded stocks closed higher, with 96 per cent of the stocks in the A and B1 groups""comprising large caps and midcaps respectively""advancing.

India was the best performer among key Asian markets, which showed a bullish trend overall. The positive trend largely had to do with initial reports which showed Hurricane Rita had not caused any major damage to oil rigs in Texas as was widely feared.

Traded turnover on both the exchanges combined was around Rs 85 billion, compared with around Rs 114 billion on Friday.