Selloff talks fire up markets

Shares rallied for a sixth straight day on Thursday, helped by the government's plan to sell a stake in Bharat Heavy Electricals Ltd (Bhel)and a buoyant response to Infosys Technologies' US share sale.

Taking a cue from short covering in the derivatives market, the cash market rose for the sixth straight day with a higher volume but profit taking was seen in side counters, brokers said.

The Bombay Stock Exchange Sensex rose 1.1 per cent by 73.18 points to 6,670.78 points, still 4 per cent off its historic high of 6,954.86 on March 9, but up 9 per cent since April 18. The BSE small-cap index was down 0.50 per cent and the mid-cap index fell 0.10 per cent.

The Bhel counter attracted huge buying attention, rising to an all-time high of Rs 918 in intra-day trade before closing at Rs 909.85, up 4.56 per cent from its previous close. More than 368,000 shares were traded on the BSE. The Oil and Natural Gas Corporation stock rose 2.1 per cent to Rs 901.80 as world oil prices surged.

Among frontline counters, 23 of the 30 Sensex scrips closed higher. But the breadth of the market was negative, with losers outpacing gainers 3:2 in the BSE. The traded volume was higher than yesterday's, with a turnover of Rs 2,172.69 crore recorded on the BSE and Rs 5621.11 crore on the NSE.

Wipro was up 4.24 per cent to Rs 715.65, Bharti Tele-Ventures gained 3.23 per cent to Rs 227.25, Tata Power was up 3.20 per cent to Rs 385.30 and Ranbaxy Labs was up 2.65 per cent to Rs 1067.75.

The HPCL scrip was the biggest loser in the Sensex basket, falling 1.65 per cent to Rs 330.90, ACC fell 1.25 per cent to Rs 380.15, Satyam Computer was down 0.86 per cent to Rs 448.75, HDFC Bank fell 0.68 per cent to Rs 536.55 and Zee Telefilms fell 0.18 per cent to Rs 139.75.

A dealer from a domestic broking house said, 'Short covering on the last day of the expiry of the current month's F&O contracts triggered a rally in the cash market. But we saw some profit booking in mid-cap and small-cap counters on Thursday.' The monsoon will now be closely watched, analysts added.

The current current month's futures contracts expired on Thursday, leading to some volatility the but roll-over was smooth, analysts added.