Spotlight on PSUs

STOCKS REPORT

Strong gains in shares of state-run firms lifted key indices on Monday for the second consecutive session today. Investors gained confidence after the public offering of ONGC received an overwhelming response.

Moreover, the market undertone was strong on expectations of strong quarterly results in key bluechip companies.

The 30-stock Sensex of the Bombay Stock Exchange (BSE) surged by 54.84 points, or 0.93 per cent, to end at 5,935.19, off the day's low of 5,898.57. The National Stock Exchange's S&P CNX Nifty rose 17.55 points to close at 1,885.25.

The market breadth turned positive as gainers outnumbered losers in brisk trades. On the BSE, 892 stocks advanced and 773 stocks declined.

Vipul Sanghvi, senior manager of institutional sales at Fortis Securities, said, "State-run firms led the rally today because of the better-then-expected response to the public offers of GAIL and ONGC." "Confidence is back, there is more retail participation and the rally has extended to even the mid-caps."

Shares in ONGC gained 6.06 per cent to end at Rs 850.90, off from the day's high of Rs 878 on sustained buying interest.

Other state-run counters also witnessed buying interest spread across. Refinery major HPCL rose 6.32 per cent to Rs 530.30. GAIL shot up by 7.20 per cent to Rs 230.15 on renewed buying interest after the government priced its public offer at Rs 195 a share.

IPCL shares rocketed by 9.77 per cent to close at Rs 225.35, CMC jumped 1.73 per cent to Rs 592.95 and IBP surged 1.59 per cent to Rs 673.65, after the government's public offers to sell residual stakes in erstwhile PSUs were oversubscribed several times.

Meanwhile, shares in BHEL vaulted 2.64 per cent to Rs 624.95 and those in MTNL gained by 1.59 per cent to Rs 144. Dredging Corporation of India was only the counter which saw negative sentiment. The shares in the PSU fell 0.62 per cent to Rs 585.05, off its day's high of Rs 645.

Earlier in the day, the stock rose as much as 9.56 per cent after the announcement that the government's public offer for the sale of 20 per cent stake was oversubscribed 18 times.