Bulls overcome volatility, Tata Steel
Time grabs you by the wrist, directs you where to go
So make the best of this test, and don't ask why
It's not a question, but a lesson learned in time
It's something unpredictable, but in the end it's right.
I hope you had the time of your life
It was another volatile and eventful week on Dalal Street. The bulls bounced back with a bang after Tata Steel's seemingly expensive Corus deal upset the apple cart. Even the quarter percentage point hike in the repo rate could not deter the bulls from propelling the key indices to all-time closing highs. The bulls also chose to ignore the spike in oil prices, which rose above the US$57 per barrel mark. Strong earnings growth and firm global markets lent good support to the rally. There were impressive gains across counters like Capital Goods, Auto, Telecom, Infrastructure and Consumer Durables. L&T, R Com, Bharti Airtel, BHEL, Hindalco and REL were the major gainers in the Sensex. On the other hand, Tata Steel, ITC and HLL topped the losers' list. The unpredictable nature of the market did catch many by surprise. However, in the end the bulls had the last laugh. with the benchmark Sensex crossing the 14400 mark for the first time and the NSE Nifty closing above 4150. The Sensex added 121 points or 0.85% over the truncated week to end at 14404 and the Nifty rose 36 points or 0.86% to close at 4184.
Telecom stocks were the flavour of the week with Bharti Airtel and R Com leading from the front. The latter came out with a strong set of numbers for the third quarter and said it will list Flag Telecom globally. On the last day of trading, the Telecom Regulatory Authority of India (TRAI) cut inter-connection charges by 23% to 29%. The move could result in more and more new telecom users coming in. R Com said its Q3 net profit climbed to a record Rs9.24bn and sales rose 26% to Rs37.55bn. Bharti Airtel was the top gainer and gained over 12% to Rs771. R Com spurred by over 12% to Rs490, VSNL added 3% to Rs505.
Auto stocks were a mixed bag with Maruti and Bajaj Auto closing higher on the back of strong sales figures for January. Hero Honda was among the losers after the company announced disappointing Q3 results. Bajaj Auto paced ahead by 1.4% to Rs2777 and Maruti rose 1.3% to Rs944. However, M&M lost 1% to Rs912, Tata Motors was down by 07% to Rs910 and Hero Honda fell marginally by 03% to Rs716.
IT stocks were up during the week. The heavy weights led from the front, Satyam advanced 4.4% to Rs490, Wipro rose 1.7% to Rs643 and Infosys was up by 1.3% to Rs2259. Among the Mid-Cap stocks Patni gained 3.3% to Rs446 and Mphasis BFL surged by over 6% to Rs302.
Capital Goods stocks were among the star performers. L&T surged over 6% to Rs1677, BHEL rose over 5.5% to Rs2508, ABB was up by 4.3% to Rs3752 and Gammon India spurred over by 65% to Rs415.
Cement stocks also did well. Gujarat Ambuja spurred by 37% to Rs142, ACC was up by 1.3% to Rs1040, Grasim gained 08% to Rs2811, India Cements rose 0.9% to Rs221 and Madras Cement added 1% to Rs3420.
Pharma scrips recorded healthy gains. Orchid Chemicals rallied by over 13% toRs256, Divi's Lab rose nearly 8% to Rs3356, Strides Arcolab was up by 64% to Rs383 and Lupin advanced by 5.5% to Rs618. Among the heavy weights Ranbaxy rose nearly 3% to Rs413.
Not surprisingly, Tata Steel was the top loser in the 50-stock NSE Nifty. The scrip fell by nearly by 4% over the week to Rs462 after touching a high of Rs520 and a low of Rs451. Investors are concerned that the company may have overpaid for Corus. Also, the increased debt could put the company's finances in jeopardy.