PSU dividend hopes raise Sensex 65 pts

Public sector company stocks were in the limelight on the bourses today, with metal and IT counters adding to the sheen.

Despite falling almost 35 points in early trades, good buying interest in blue-chip counters at lower levels combined with short covering led to the Bombay Stock Exchange (BSE) Sensex hitting an intra-day high of 5533.33 before closing at 5527.56, up 1.19 per cent (64.95 points) over Tuesday's close.

Blue-chips were in demand, with 20 of the 30 scrips in the Sensex basket closing higher. The broader markets was also positive; gainers outpacing losers 3:2 on the BSE.

Not surprisingly, the BSE Oil & Gas index was the biggest gainer today among sectoral indices, up 2.47 per cent, followed by the BSE metal index, which gained 2.40 per cent. The BSE PSU index closed 1.90 per cent higher and the IT index was up 1.79 per cent.

Reliance Industries was the biggest gainer in the Sensex basket, up 3.61 per cent to Rs 514.10, followed by HLL, up 3.25 per cent to Rs 124.05. Tata Power gained 3.16 per cent to Rs 312, Tata Steel was up 2.64 per cent to Rs 289.85 and Satyam Computer gained 2.27 per cent to Rs 373.80.

Brokers said that investors lapped up blue-chip counters in anticipation of strong earning reports for the July-September quarter. PSU companies saw buying after the government said on Tuesday it would ask them to disgorge a minimum dividend and consider bonus shares.

Rajesh Kamdar, a dealer at a local brokerage, said, "There was some short covering today, with investors also moving into front-line stocks from the small and mid-caps scrips, ahead of the earnings season." Players said that bargain hunting at lower levels helped the markets recover but investors were cautious ahead of the expiry of the September series futures contracts on Thursday. Worries about firm global oil prices took a back seat today but market sources said that this remains a concern.

Infosys Technologies gained 1.76 per cent to Rs 1639.70, ONGC was up 1.74 per cent to Rs 747.35, Hindalco gained 1.57 per cent to Rs 1314.40 and the State Bank of India scrip was up 1.38 per cent to Rs 472.95.

ICICI Bank was the biggest loser in the Sensex basket, down 1.23 per cent to Rs 288.05, followed by Dr Reddy's Labs, down 1.13 per cent to Rs 728.15. Bharti Tele-Ventures fell 0.95 per cent to Rs 140.30.

Turnover in the cash segment was higher than on Tuesday; the BSE reported a turnover of Rs 2,073.18 crore and the National Stock Exchange reported a turnover of Rs 4,507.47 crore.