PSUs gain more ground

STOCKS REPORT

Equities gained for the second consecutive day on growing hopes that Manmohan Singh, the former finance minister, will become the next prime minister.

Building on Tuesday's gains, the Bombay Stock Exchange's (BSE) 30-share Sensex gained 183 points in intraday trades to touch the day's high of 5059.89.

The bellwether index closing above the key 5,000-level at 5,006.10, up 2.65 per cent, or 129.08 points over Tuesday's close.

The National Stock Exchange (NSE) S&P CNX Nifty, a broader index, gained 4.25 per cent, or 63.90 points, to close at 1,567.85.

The Sensex has now gained more than 500 points in the past two trading sessions.

Shares in public-sector undertakings (PSUs) were in the limelight.

The BSE PSU index was the largest gainer in sectoral indices. The index, which took a severe battering on Monday, gained 6.6 per cent on Tuesday and 9.21 per cent yesterday.

The BSE capital goods index rose 6.56 per cent, consumer durables index went up by 5.25 per cent, Bankex was up 5.12 per cent and TECk rose 1.93 per cent.

Market players said the PSU stocks gained on hopes that Manmohan Singh will maintain the pace and fabric of economic reforms. BHEL was the biggest gainer in the Sensex stocks.

The share went up 14.76 per cent to Rs 502.30. ONGC rose by 9.75 per cent to Rs 701.60. MTNL was up 2.77 per cent to Rs 124.30 and HPCL gained 2.46 per cent to Rs 326.70.

State Bank of India gained 7.11 per cent to Rs 525.75, Reliance Industries was up 4.29 per cent to Rs 452.25 and Hindustan Lever was up 3.03 per cent to Rs 134.30, while ITC was the biggest loser in the Sensex basket, falling 2.01 per cent to Rs Rs 899.10.

The breadth of the market was positive, with advances outnumbering declines by 3-to-1. Among Sensex stocks 20 ended higher.

Widespread buying was seen with traded volumes slightly higher than that on Tuesday: the cash market turnover was at Rs 2,402.37 crore on the BSE and Rs 5,309.95 crore on the NSE.

Brokers added that hopes were high in the market that Manmohan Singh, the original architect of reforms, would ensure continuity. This positive sentiment was further boosted by the central bank holding interest rates steady on Tuesday and indicating that it was in no hurry to raise them.

Firmer global markets and signs that global crude oil prices may ease helped the positive sentiment but market participants confirmed that uncertainty still persisted and the market will await for the Common Minimum Programme before taking a further call.

Foreign Institutional Investors (FIIs) continued their selling spree, with net outflows of Rs 227.50 crore on Tuesday. Mutual funds, too, turned net sellers on Tuesday at Rs 23.61 crore after eight consecutive buying sessions.

There are fears in the market that higher interest rates in developed economies could trigger an outflow of money, though analysts said that India-specific funds invested for the longer term and emerging market funds will continue to stay.

Tech bellwether Infosys Technologies was up 1.94 per cent to Rs 4,981.55 and Satyam Computer gained 1.43 per cent to Rs 312.40 though heavyweight Wipro fell 2.24 per cent to Rs 1,523.20.

Tata Power was up 9.02 per cent to Rs 314.10 and Tata Steel was up 7.32 per cent to Rs 315.10. Bharti Tele-Ventures was up 5.62 per cent to Rs 155 and Gujarat Ambuja Cements was up 4.68 per cent to Rs 298.50.

Tata Motors gained 4.72 per cent to Rs 420.70 and Sensex debutant Maruti Udyog was up 4.24 per cent to Rs 466.10. Market debutant NDTV closed at Rs 99.40, a 42 per cent premium over its offer price of Rs 70.