Succour from pre-Budget rally

STOCKS REPORT

The markets extended gains for the third consecutive day as the benchmark Bombay Stock Exchange (BSE) Sensex gained 1.71 per cent or 81.21 points to close at 4837.60 on Monday.

The markets rallied on the back of gains in metal, technology, select heavyweight stocks and the recently battered pharmaceutical stocks. Brokers termed the gains as "classical pre-Budget rally".

The Nifty ended 1.74 per cent or 25.85 points higher to close at 1514.35. The Sensex in the last three trading sessions has gained 198.86 points. Among 30-share Sensex basket, only five stocks posted losses.

Monday's gains were on the back of brisk trade with the total turnover on the BSE accounting for Rs 1,658.42 crore.

The market breadth remained positive with advances outnumbering declines in the ratio of three to one.

Metal stocks rallied on renewed buying on expectation that demand from China will push steel prices higher.

The share price of aluminium major Hindalco gained 5.4 per cent to Rs 1023. Steel Authority of India gained 3.8 per cent to Rs 27.20.

Uttam Steel was up 9.06 per cent to Rs 12.40, Ispat Industries up 8.47 per cent to Rs 7.81, Bhushan Steel up 6.84 per cent to Rs 82.75 and Essar Steel up 5.48 per cent to Rs 15.40 were among the gainers.

Pashupati Advani of Advani Share Brokers said, "The market looks range-bound till the Budget with a positive outlook. There may be a relief-buying in select sectors with activity in technology and other blue chip stocks."

Infosys Technologies ended 2.2 per cent higher to Rs 5598.95. Wipro gained 4.5 per cent to close at Rs 556.45, while Satyam closed 2.08 per cent higher on accumulation by domestic funds. The stock closed at Rs 315.60 on the BSE.

Analysts said a weaker rupee has continued to boost software services companies, which derive more than 70 per cent of their revenues from exports.

Hanu Bhatia, senior vice-president, Parag Parikh Financial Advisory Services, said, "Monday's rally was led by renewed buying in metal stocks which later extended to technology and pharmaceutical. It looks like a pre-Budget rally which may continue till the Budget announcement."

The recently battered pharmaceutical stocks witnessed value-buying. Dr Reddy's gained 2.8 per cent to Rs 743.60 and Cipla rose 6.10 per cent to close at Rs 214.64.

Ranbaxy ended 1.95 per cent higher to Rs 920.90.

Index heavyweight Reliance Industries ended 2.3 per cent higher to close at Rs 441.60. State Bank of India rose 3.31 per cent to close at Rs 433.35, while ITC gained 1.14 per cent to close at Rs 875.

Among losers were Hindustan Lever down 0.31 per cent to Rs 127.60 and Oil and Natural Gas Corporation was down 0.50 per cent to Rs 630.60.

Jagdish Malkani, a broker on the National Stock Exchange, said, "The market is witnessing a classical pre-Budget rally. But I am not very convinced. The Nifty needs to break the 1,540 barrier for the current positive trend to continue."

Among losers were HDFC, down 1.57 per cent to Rs 543.45. The stock slipped following concerns that interest rates are likely to surge.

Automobile stock Hero Honda Motor was down 1.03 per cent to Rs 488.50 and Reliance Energy ended 0.98 per cent lower to Rs 554.

Meanwhile, automobile stocks such as Maruti Udyog gained 1.8 per cent to close at Rs 392.10, while Tata Motors ended 1.15per cent higher to close at Rs 384.20.

Bajaj Auto ended in the positive territory to close at Rs 899.

Cement pivotals ended positive with ACC gaining 2.49 per cent to Rs 240.95. Grasim ended 2.33 per cent up to Rs 966.10, while Gujarat Ambuja Cements was up 2.18 per cent to Rs 280.85.