Bargain hunting revs up Hero Honda

DALAL STREET SPIKES

Bargain hunting at lower levels spurted Hero Honda in Tuesday's trading as the scrip gained over 6 per cent in a rather subdued market.

The counter witnessed buying support from domestic as well as foreign institutional investors at lower levels after Monday's massive fall, said analysts. The scrip, after hitting the day's high of Rs 516, closed at Rs 513.40, gaining Rs 29 from its previous close.

The stock has been witnessing aggressive buying in anticipation of impressive performance on the back of the strong economic outlook and rumours of the company planning a bonus issue.

The bonus rumours were denied by the company lately. The stock has, from February 3, appreciated by 21.3 per cent compared to Tuesday's close.

Auto analysts say two-wheeler sales are expected to continue at a strong pace, given that financing continues to be easy and interest rates are low. Hero Honda registered a 35 per cent growth in two-wheeler sales in January 2004.