Sensex ends higher amid volatility

STOCK REPORT

Good gains in heavyweight stocks saw major indices recoup from initial losses and rise nearly 1 per cent Monday.

The 30-share Bombay Stock Exchange's Sensex ended above the 10,000 mark yet again, after slipping below the level Friday for the first time in seven sessions. Dealers attributed the volatility to short covering ahead of February futures contract expiry on Thursday.

Sensex ended 10079.30, up 98.19 points, or 1.0 per cent, from Friday after testing an intra-day low of 9896.64. National Stock Exchange's Nifty ended 3005.85, up 24.35 points, or 0.8 per cent.

The session had a total traded turnover of Rs 8,509 crore compared with Rs 11,163 crore combined on both exchanges on Friday.

Market breadth on BSE also depicted weakness as 63 per cent of the total frontline stocks ended in the red. Overall, losers outnumbered gainers 1,669:805.

Indices were down for most part of the session, as a continuation to Friday's fall below 10,000. However, bargain buying by funds and short covering pushed indices higher post mid-session.

Nifty February futures provisionally ended at an 8-point premium, with nearly 11 per cent rise in open interest.

Nifty heavyweight Oil and Natural Gas ended up 2.1 per cent. Reliance Industries and Infosys Technologies ended up 1.3-1.5 per cent. Hindustan Lever and Maruti Udyog were top Nifty gainers, up 3.4 per cent each.

ITC shares ended up 0.6 per cent at Rs 162.85. Cipla ended up 3 per cent. The company's shares had risen on media reports that the company is set to launch its version of bird flu drug by Wednesday.

Most hotel shares ended down sharply amid thin trade on worries that tourist inflows could be affected by bird flu outbreak.

Oriental Hotels was down 6 per cent. Indian Hotels and EIH shares were down 4 per cent and 3 per cent. Hotel Leela Venture was down marginally.

On Nifty, cement and technology shares led gainers. Grasim Industries and Associated Cement were up around 3 per cent each.

Dealers were very bullish on the sector and expect cement prices to firm up owing to rising demand over the next few months.

Among sector-specific indices, CNX IT index rose 0.8 per cent, while CNX Bank index ended up marginally.

Wipro, Tata Consultancy Services, Satyam Computer Services, and Infosys Technologies rose 1-2 per cent. HCL Technologies was the only exception, down 1.5 per cent. Zee Telefilms, down 4 per cent, was the biggest Nifty loser.

Mahanagar Telephone Nigam, HDFC Bank, Steel Authority of India, Bharat Heavy Electricals, Larsen and Toubro, and Mahindra & Mahindra shares were down 2-3 per cent.

HCL Infosystems slipped 30 per cent on news that it has extended distribution pact with Nokia for five years. Players believe the deal would adversely impact HCL as it implied slowing down of revenue growth and huge business opportunity loss.

JP Morgan on Monday downgraded HCL Infosystems to "underweight" from "overweight" and cut its target price to Rs 225 per share from Rs 300. Midcap shares continued to remain under pressure. CNX Midcap index ended down 1.3 per cent at 4311.55.