Sensex scores on volatile pitch

Market sees sharp swings on Moorat trading day, but players bullish on outlook.

Stock markets made a cracking start to Samvat 2062, gaining over 100 points in early trades, but the gains petered out as the Moorat session came to a close.

The BSE Sensex still closed the day at 7944.10, up 51.78 points from its previous close. The S&P CNX Nifty ended the day at 2386.75, up 15.80 points from its previous close.

The Moorat trading, which was limited for just over an hour, was marked by volatility. The Sensex had surged 125.24 points in early trades at 8017.56 before coming off highs.

Among the 30 Sensex stocks, 22 ended the day with gains, while seven scrips declined. Cipla remained unchanged. While the Sensex gainers were spread across sectors, notably oil refining stocks, the banking counters witnessed losses.

Ironically, it was HDFC Bank, which proved to be the biggest gainer among the Sensex stocks. The stock advanced 3.32 per cent to close at Rs 626.10. Hindalco (up 2.63 per cent at Rs 117.10), Tata Motors (up 2.54 per cent at Rs 485), Dr. Reddy's Labs (up 1.94 per cent at Rs 823) were the other big gainers.

In comparison, losses were marginal at most counters, with only BHEL (down 1.09 per cent at Rs 1122.50) posting an above 1 per cent loss. Ranbaxy (down 0.17 per cent at Rs 350.25), Hero Honda (down 0.11 per cent at Rs 706.05) and ICICI Bank (down 0.11 per cent at Rs 497.15) were the other top losers.

All other leading indices gained as well, as investors made their customary Moorat buying. The BSE Consumer Durables Index was the biggest gainer among sectoral indices, up 2.69 per cent. BSE Small Cap Index (up 2.42 per cent) and the BSE Mid Cap Index (1.18 per cent) also posted gains. The BSE Auto, Metal, Oil & Gas, Teck, FMCG and PSU indices also closed at higher levels today.

Reliance was the most active counter with a turnover of Rs 72 crore followed by Titan (Rs 59 crore), Reliance Capital (Rs 56 crore), Suzlon (Rs 29 crore) and Satyam (Rs 28 crore).

Overall, advances far outnumbered declines during the day's trade which lasted over an hour. The number of advances amounted to 1839, while declines numbered 391. While 52 scrips remained unchanged, the BSE clocked a turnover of Rs 763 crore.

According to analysts, markets are in a consolidation phase and the long-term outlook is still positive. Anand Rathi, chairman of domestic securities firm Anand Rathi Securities, said the outlook remained positive on the economy as well as the markets. "The index should cross 9000 in the next one year," says Rathi.

Analysts are also bullish on the earnings growth front. "The corporate performance was quite satisfactory in the first and the second quarters of the current financial year and will continue to perform well going forward," says Jigar Shah, vice-president of domestic brokerage KR Choksey.

Much will depend on sustained foreign inflows into Indian markets as well. "On a cumulative basis, for the current calendar year, we have witnessed unprecedented amount of foreign inflows and going forward it will continue to remain positive," says Shah.

Though some experts have expressed doubts that Indian stock valuations are running high, Shah played it down saying, Sensex valuation at about 14 times the current year earnings is not very aggressive and could improve with the help of greater reforms and better corporate performance. All in all we expect the market to register about 15-20 per cent growth from the current levels over the next 12 months."

Markets will be keenly awaiting today's US Fed meeting which will decide on the US interest rates. According to analysts, markets have already priced in a 25 basis point hike in the rates.