Short-covering fuels Sensex past 12,000

STOCK REPORT

Institutional buying and short covering helped the Sensex gain nearly 4 per cent on Thursday taking at close above 13000.

A 1-2 per cent rise in other Asian markets despite overnight weakness in the US injected positive sentiment here, dealers said.

Across the board buying by investors saw all Bombay Stock Exchange sector indices gain over 2 per cent.

"FIIs (foreign institutional investors) have been covering short positions for the last two days, which is why market came off lows Wednesday. There will be value buying now as markets seem oversold at the moment," said Prakash Rajdev, chief dealer of Khandwala Securities.

On Thursday, the Sensex ended at 13049.35, up 469.60 points or 3.7 per cent. The day's low was 12596.86 and high was 13099.83.

The National Stock Exchange Nifty ended at 3761.65, up 134.80 points or 3.7 per cent.

It moved between a low of 3626.80 and a high of 3779.50 in the session.

The combined turnover on both exchanges was Rs 11,700 crore.

The CNX Midcap Index ended up 3.7 per cent and S&P CNX 500 Index up 3.9 per cent.

However, despite the rise on Thursday, dealers advise investors pick up stocks selectively for the next two months.

Credit Suisse Vice-Chairman Robert Parker said in a TV interview on Thursday that markets are likely to remain under pressure in March and April, primarily due to high interest rates and weakness in the US economy.

Index heavyweight, Oil and Natural Gas ended up 1.9 per cent at Rs 779 after its overseas arm signed an exploration and production-sharing pact with Libya's National Oil for four offshore blocks.

A rise in crude oil prices to $62 a barrel on the New York Mercantile Exchange also aided sentiment for oil explorers.

Reliance Industries ended up 3.6 per cent at Rs 1,335, as the company will consider merger of Indian Petrochemicals with self on Saturday. Shares of IPCL also ended up 12.8 per cent at Rs 260.

Steel shares were up on Thursday as steel prices are likely to remain firm because China is rumoured to have approved part-elimination of iron and steel making capacities to check its economic growth.

Steel Authority of India ended up 13 per cent at Rs 104; Tata Steel up 3.5 per cent at Rs 428; and JSW Steel up 8 per cent at Rs 445.

Gujarat Ambuja Cements shares gained 8.7 per cent at Rs 113 on news the company has sold a property in Kalina in Mumbai to developer, Orbit Corp, for Rs 330 crore. It is the most expensive land deal in Mumbai.

Mahindra and Mahindra erased losses to end up 0.6 per cent at Rs 766. The stock was down early on Thursday as analysts see the company losing out to Ashok Leyland in the race to acquire Punjab Tractors.

Among the rare losers on Thursday, Zee Entertainment ended down 2.4 per cent at Rs 238; Glaxosmithkline Pharmaceuticals down 1.3 per cent at Rs 1,160; and GAIL down marginally at Rs 271.

Bharat Petroleum ended nearly flat after staying weak after crude oil prices surged.

Shares of Indus Fila listed on the BSE on Thursday at Rs 145, Rs 25 below its issue price. The stock ended at Rs 135.