Short covering props up sentiment

STOCKS REPORT

The markets ended on a positive note on Friday owing to short covering in public sector oil and bank stocks in the later half of the trading session.

In volatile trading, the Bombay Stock Exchange (BSE) Sensex regained all its early morning losses to close 71.01 points higher at 4889 points.

The Sensex, in intra-day trades, touched a low of 4759.35. The S&P CNX Nifty Index ended 26 points higher to close at 1521.10.

Gainers outnumbered losers as only six stocks among the Sensex stocks ended with losses.

Most gains were witnessed in the last half-an-hour of the session on the back of smart recovery in index heavyweights "" Reliance Industries, Tata Steel, State Bank of India, oil firms such as Hindustan Petroleum Corporation Ltd, Oil and Natural Gas Corporation and bank stocks.

The Bankex Index was the second biggest gainer after the BSE PSU index, closing at 2596.21, up 1.78 per cent from its previous close.

An institutional dealer with a domestic brokerage said that there had been some short covering in mid-afternoon trades, but the volumes remained low.

Among index heavyweights, Reliance Industries ended 1.24 per cent higher to close at Rs 433.60, while State Bank of India (SBI) rose from a low of Rs 461.10 to Rs 489.95 in intra-day trades before settling at Rs 486.75, up 3.69 per cent over its previous close.

SBI has a weightage percentage of 4.19 per cent in the Sensex. More than 26.21 lakh SBI shares were traded on the BSE. Hindustan Lever Ltd ended 2.06 per cent higher at Rs 138.65 contributing further gains to the Sensex.

HPCL and ONGC witnessed fresh buying on easing crude prices in the international markets. While HPCL ended 4.05 per cent higher at Rs 327.35 on value buying at lower levels and ONGC ended 2.42 per cent higher to Rs 650.70.

Other refinery stocks such as Indian Oil, up 2.61 per cent to Rs 369.70, Chennai Petroleum, up 1.02 per cent to Rs 119.40, and Kochi Refineries, up 0.78 per cent to Rs 154.80, ended higher on fresh buying.

Ambreesh Baliga, vice-president, Karvy Stock Broking, said, "The markets still looks weak and there could be selling pressure at every higher levels. The markets are expected to remain range-bound till the Budget announcement as it lacks a clear direction."

Public sector bank stocks, which were hammered over the past few trading sessions, witnessed renewed buying on Friday.

Among major gainers, Punjab National Bank ended 7.89 per cent higher to close at Rs 283.70, while others such as Bank of Baroda, Oriental Bank of Commerce and Syndicate Bank ended 1-3 per cent higher.

Though the Sensex crashed 105 points lower in yesterday's trading, foreign institutional investors were net buyers to the tune of Rs 51.70 crore.

FIIs were also net buyers on Wednesday to the tune of Rs 52.80 crore and have poured in a total of Rs 528.10 crore in the last four trading sessions. However, they were net sellers to the tune of Rs 3246.90 crore in May.

Tata Steel witnessed renewed buying ahead of the company's board meeting on July 7 to consider a bonus issue. The stock was the biggest gainer among the Sensex stocks to close 5.91 per cent higher to Rs 315.45 on an impressive volume of 59.09 lakh shares on the BSE.

Automobile stocks were also in action after a recent hammering despite the good sale number for the month of May.

Tata Motors ended 4.24 per cent higher to close at Rs 391.20, while Maruti Udyog ended 1.60 per cent higher to close at Rs 383.80 and Hero Honda ended 1.02 per cent higher to close at Rs 479.95.