Fund inflows sustain tempo

STOCKS REPORT

Reliance and volatility hit the equity market even as the country reeled under the effects of Sunday's tsunami which struck India's eastern coast.

The benchmark Bombay Stock Exchange (BSE) Sensex rose to a new closing high on Monday on the back of strong foreign fund flows. But profit taking dragged it down from its intra-day highs.

The Reliance counter played on sentiment and added to the volatility as confirmation of the buy-back offer was received with scepticism, market sources said.

Brokers said that as expected the Reliance Group stocks displayed volatility after the company decided to consider buyback of shares at a premium to the market price.

Uncertainty about the family feud over management was the more important issue and played spoilsport, they added. Reliance Industries was the biggest loser in the Sensex basket, falling 1.29 per cent to close at Rs 516.85 while other Sensex scrip Reliance Energy was down 0.71 per cent to Rs 526.

Huge volatility was seen in intra-day trades even as concerns over the outcome of the board meeting of Reliance Industries dragged the market in early trades on Monday.

Institutional buying in other bluechips lifted the market from the lower levels to a new high in early afternoon. But fresh selling pressure at higher levels pulled down the market towards close of the session.

Market players said that a further upside is expected as foreign fund inflows continue to be strong and valuations do not look stretched at this point.

Despite the huge casualty and losses caused by the tsunami, the undertone of the market appeared optimistic on hopes of strong quarterly results and sustained foreign fund inflows.

Metals, consumer durables and capital goods scrips were among the biggest gainers while select oil and technology companies recorded losses on Monday. The breadth of the market was positive with gainers outpacing losers 5:4. In the Sensex basket, 19 out of the 30 scrips closed higher.

Foreign funds were net buyers of Indian shares worth Rs 187.60 crore on Friday and have bought shares net worth Rs 5,226.90 crore in December so far, data released by the Securities and Exchange Board of India show.

Moving in a range of 97 points, the BSE Sensex hit a high of 6,566.64 and a low of 6,469.96 in intra-day trades before closing at 6,513.03, up 14.97 points (0.23 per cent) from Friday's close.

Volumes were lower than on Friday in the cash segment of the bourses; the BSE reported a turnover of Rs 2,015.94 crore and the NSE reported a turnover of Rs 4,612.81 crore.

Tata Steel was the biggest gainer in the sensex basket, surging 4.19 per cent to close at Rs 374.05, followed by Gujurat Ambuja Cement, up 1.88 per cent to Rs 399.05, L&T was up 1.70 per cent to Rs 991.80, Bhel gained 1.54 per cent to Rs 736.80 and Cipla was up 1.22 per cent to Rs 307.60.

Among the biggest losers in the Sensex basket included ONGC, down 1.09 per cent to close at Rs 847.60, Maruti Udyog fell 1.05 per cent to Rs 463.20, Hindalco was down 0.85 per cent to Rs 1,321.80 and Wipro fell 0.76 per cent to Rs 751.25.