Short-covering aids bounceback

Bargian hunting in cement, auto and technology stocks lifted key indices marginally on Tuesday. The sentiment, however, remained negative ahead of the expiry of derivatives contracts and the close of the financial year.

The Bombay Stock Exchange's (BSE) 30-stock index, Sensex, moved in an intraday range of 125 points and ended with a modest gain of 0.66 per cent, 35.59 points, to end at 5,400.99.

During the day, the benchmark index touched a low of 5,324.78 and a high of 5,450.38 in intraday trades. The National Stock Exchange's (NSE) S&P CNX Nifty, a broader index, edged up by 11.40 points to end at 1,696.40. The market breadth was negative, with losers outnumbering gainers by two-to-one in thin trading.

"The gains were largely from the covering of short positions ahead of the derivatives expiry after investors liquidated their positions on Monday," said Vipul Sanghvi, senior manager of institutional sales at Fortis Securities. "There was no major pressure to sell, but retail and institutional investors are choosing to stay out till the end of the month, at least. Hence, the thin volumes."

Cement and auto stocks gained on expectations of strong March sales numbers and on expectations that the booming economy will boost demand. Gujarat Ambuja Cements rose 3.64 per cent to Rs 294.80 on renewed buying interest. Grasim surged 2.05 per cent to Rs 1,023.95 and Larsen & Toubro added 1.14 per cent to Rs 563.75 on value buying after recent weakness.

Among automobile stocks, Bajaj Auto rose 1.35 per cent to Rs 864.30 on selective buying interest. Bikes major Hero Honda Motor added 0.54 per cent to Rs 450.35 on selective fund-based buying. Maruti Udyog, the biggest car maker, rose nearly one percent to Rs 446.05.But Tata Motors fell 1.16 per cent to close at Rs 428.85.

Infosys Technologies bounced back from an intraday low of Rs 5,016.35 to a high of Rs 5,230 before settling at Rs 5,157.50, up 1.49 per cent over its Monday's close on value buying. Satyam Computer too rose 0.85 per cent to Rs 298.30 and Wipro surged 0.83 per cent to Rs 1,392.60 on value buying at lower levels after recent weakness.

Meanwhile, media stocks gained after a ban on political advertisements on television ahead of the general elections was lifted. Zee Telefilms rose 4.47 per cent to Rs 119.15 and the TV Today Network rose nearly four percent to Rs 130.95.

Sustained buying was witnessed in select index heavyweight counters too. Drug major Cipla rose 0.91 per cent to Rs 1,154.35, off day's low of Rs 1,135.25 on selective buying ahead of the company's board meeting to consider a stock-split.

FMCG gaint Hindustan Lever added 0.77 per cent to Rs 150.70. Reliance Industries surged 0.52 per cent to Rs 510.60. But MTNL fell 3.59 per cent to Rs 123.50 on sustained selling pressure on the counter. ICICI Bank came off from a high of Rs 278.10 to Rs 266 in the intra-day trades before settling at Rs 272.10, down 1.84 per cent from its Monday's close.

National Fertilizers jumped 6.11 per cent to Rs 34.75 on reports that the government has decided to call fresh bids for the sale of 51 per cent stake in the state-run fertilizer firm.

Shares in Pantaloon Retail India jumped 6.50 percent to Rs 235.60 after Goldman Sachs Investments (Mauritius) upped its stake to 6.90 percent.