Rollover rally

STOCKS REPORT

Strong corporate quarterly results and a smooth rollover in the derivatives segment fuelled the largest single day rise of 2005 in the equity market on Friday.

The benchmark Bombay Stock Exchange (BSE) Sensex closed higher as investors turned bargain hunters and value buyers for the third straight day.

Banking, technology, capital goods, pharma and cement companies were among the biggest gainers on Friday. The breadth of the market was positive with gainers outpacing losers 8:3. In the BSE Sensex basket, 27 out of the 30 scrips closed higher.

Brokers said that strong institutional buying after a substantial rollover of derivatives contracts yesterday helped the market post smart gains on Friday as the smooth roll-over was looked upon positively, he added.

A short correction after the sharp rise is expected but the undertone is positive, they added. Lower international oil prices helped the sentiment, analysts added.

Banking and index heavyweight State Bank of India led the gains in the market after the company announced better than expected quarterly results.

Opening in positive territory, the BSE Sensex hit a high of 6,432.58 in intra-day trades. The Sensex finally closed at 6,419.09, up 179.66 points (2.88 per cent) from Thursday's close. Volumes were higher than on Thursday in the cash segment of the bourses, the BSE reported a turnover of Rs 2,528.34 crore and the NSE reported a turnover of Rs 5,709.72 crore.

Tata Power was the biggest gainer in the Sensex basket, rising 7.32 per cent to close at Rs 376.80, followed by the State Bank of India scrip, up 7.08 per cent to Rs 622.75, Gujarat Ambuja Cements gained 6.72 per cent to Rs 447.85, Larsen & Toubro was up 5.84 per cent to Rs 963.45 and Ranbaxy gained 4.99 per cent to Rs 1,073.

The three losers in the Sensex basket were Hero Honda, down 1.13 per cent to close at Rs 531.25, Zee Telefilms was down 1.03 per cent to Rs 148.95 and HDFC fell 0.28 per cent to Rs 753.45.

Foreign institutional investors were net buyers of Indian shares worth Rs 198.8 crore on Thursday while domestic mutual funds were net sellers to the tune of Rs 22 crore, as per data from the Securities and Exchange Board of India website.

A dealer at a local brokerage house said, "Despite some positive results, sentiment remains cautious and the next big trigger could be the annual Budget next month."

Brokers said that they expect the market to be range bound in the near term but a pre-budget rally is very much on the card.