PSUs star in market revival

M-cap surges Rs 47,910 cr in 2 days, Sensex up 156 points y'day

PSU scrips were the stars of the Bombay Stock Exchange (BSE) Sensex's 155.66 point surge yesterday. With two consecutive days of 100-plus point gains, the market capitalisation on the BSE has increased by Rs 47,910 crore to Rs 11,84,237 crore.

Sensex scrip and divestment candidate ONGC gained 5.88 per cent to close at Rs 760.35. Among other divestment candidates, the Gail scrip closed 1.33 per cent higher at Rs 204.55 and the Dredging Corporation stock 2.97 per cent at Rs 492.15.

IBP, whose public offer closed yesterday, gained 1.23 per cent at Rs 662.60 but IPCL, whose issue closed last week, dropped 2.23 per cent to close at Rs 183.80. The CMC scrip, whose divestment offer closed last Saturday, closed today with a modest 0.74 per cent gain at Rs 564.80.

Meanwhile, in a low-key visit to Mumbai, Disinvestment Minister Arun Shourie met Securities and Exchange Board of India Chairman G N Bajpai, reportedly seeking some technical clarifications on the ONGC public offering. Shourie said the clarifications were over a minor matter and would not impede the issue in any way.

Elsewhere, PSU stock BPCL was up 6.24 per cent at Rs 491.20, HPCL 4.03 per cent at Rs 473.25, MTNL 3.85 per cent at Rs 141.70 and Bhel 3.11 per cent at Rs 598.95.

As a result, the BSE PSU index was a stellar performer, gaining 3.72 per cent (135.16 points) even as the Sensex gained 2.75 per cent (155.66 points) to close at 5823.17.

IT stocks closed with strong gains as buying interest resurfaced. Tech bellwether Infosys Technologies' scrip was up 4.94 per cent to Rs 5,322.20, Satyam Computer 3.36 per cent at Rs 320 and Wipro 2.85 per cent at Rs 1,499.05.

Heavyweights ITC was up 3.75 per cent at Rs 1,140.70, State Bank of India was up 2.69 per cent at Rs 601.05 and Reliance Industries was up 2.35 per cent at Rs 567.70. Hero Honda Motor was up 4.94 per cent at Rs 5,322.20, Bajaj Auto was up 2.47 per cent at Rs 929 and TVS Motor Co was up 4.86 per cent at Rs 104.60.

Tata Power was up 4.53 per cent at Rs 363.35 and Reliance Energy was up 4.34 per cent at Rs 774.55. Indeed, 28 of the 30 Sensex stocks closed the day with gains whereas two closed lower.

But among losers, the Dr Reddy's Laboratories scrip fell 18.13 per cent to its lowest close in eight months, at Rs 1,015.20 after a US Federal Appeals court ruled against the company's generic version of Pfizer's best selling anti-hypertension drug Norvasc.

The fall in Dr Reddy's scrip triggered a 1.19 per cent fall in the BSE Healthcare Index. The breadth of the market reflected the positive sentiment with gainers outpacing losers 976:661 on the BSE.

On the National Stock Exchange, two new entrants into the recast Nifty ended strong. Incoming stock Bharti Tele-Ventures was up 14.07 per cent at Rs 162.95 and Maruti Udyog was up 2.82 per cent at Rs 514.80.

Market players indicate strong buying support from retail and institutional investors, both domestic and foreign.

Says a dealer at a local brokerage, "The markets were in a oversold region on Thursday itself and buying was expected."

He adds that the positive sentiment was further helped after the expiry of the February series futures contracts on Thursday.

Liquidity concerns over the ONGC mega public offering still hound the market despite the good response to the ongoing public offers. ONGC is expected to garner over Rs 10,000 crore for the government and players expect the liquidity in the secondary market to improve only after the ONGC issue is over.