Sensex ends slightly higher
The market was pretty choppy during the week. Still, the key indices managed marginal gains, led by Bajaj Auto, Infosys, ICICI Bank, REL and L&T. Capital Goods, Auto, IT, Banking and Power sectors were among the major gainers helping the Sensex record its seventh straight winning week. Even PSU stocks were in action after some positive announcements by the Government on disinvestment. The Cabinet this week approved plan to sell 7% in BEML and gave the go-ahead for the IPOs of three power PSUs - REC, PGCIL and NHPC.
The higher than expected estimate for FY07 GDP boosted the sentiment on Dalal Street. The CSO (Central Statistical Organization) announced a forecast of 9.2% growth for the Indian economy. However, a sharp jump in inflation prompted profit booking at higher levels on Friday. Inflation accelerated at the fastest pace in more than two years to 6.58%, raising concern that the RBI may announce more tightening measures.
Over the week, we saw Auto and Heavy Engineering Goods companies in action. FMCG stocks continued to drift lower. Telecom stocks lost some steam after last week's rally. Real Estate companies continued to bear the burnt of the investors' ire after the RBI raised interest rates, making home loans costlier. HLL, Bharti Airtel, Hindalco and Satyam were the major losers. Finally, the Sensex added 135 points or 0.9% to close the week at 14,538.9 and the NSE Nifty rose by just 4 points or 0.09% to finish the week at 4187.
Energy stocks were in momentum on expectations that the budget will provide important incentives. Healthy order book position and capacity expansion plans boosted power stocks. Reliance Energy surged by over 4% to Rs556. Anil Ambani and associates raised their stake in the company by 4.73%. Also, the Supreme Court asked rival Tata Power to deposit Rs2.27bn in a dispute pertaining to sharing of standby charges. Suzlon gained 2.1% to Rs1245 and NTPC added 2.1% to Rs145. Suzlon joined hands with Portuguese builder Mota-Engil SGPS SA to buy German windmill maker for 1.02bn euros (US$1.33bn), topping a bid from Areva. However, Tata Power lost 1% to Rs599.
PSU stocks hogged the limelight after the Government announced disinvestments of REC, PGCIL and NHPC. BEL jumped by over 16% to Rs1598 after the company signed a contract with Northrop Grumman to explore joint production opportunities in aerospace and defense electronics technology for the Indian and overseas markets. BEML rallied by over 9% to Rs1178 and SCI rose over 12% to Rs201. The Cabinet approved the plan to sell a 7% stake in BEML through the public issue route.
Capital goods and heavy engineering stocks recorded smart gains with L&T leading from the front. The scrip added over 2% to Rs1715 after the company announced plans to start concrete plant in Dubai. L&T also signed MoUs with Boeing and EADS for exploring opportunities in defence and aerospace. ABB advanced by 2% to Rs3836, Punj Lloyd rose by over 4% to Rs1064 and Siemens added 0.7% to Rs1188.
Auto stocks were a mixed bag this week. Apart from Bajaj Auto and Hero Honda, other auto stocks mostly underperformed. Hero Honda added 1.4% to Rs726. Among the losers, Tata Motors was down 0.5% to Rs905 and Maruti edged lower by 0.4% to Rs941. Metal stocks lost their shine over the week as metal prices on LME fell sharply after a heavy losses at a hedge fund was reported. Tata Steel fell by over 2% to Rs453, Sterlite Industries dropped by over 11% to Rs459, Hindustan Zinc lost 4% to Rs663 and JSW Steel declined by over 3% to Rs446.
IT stocks were up. Infosys surged by over 4.5% to Rs2361, Financial Technologies rallied by over 13% to Rs2021 and HCL Tech was up 1% to Rs660. However, Satyam slipped over 4.5% to Rs468, TCS was down by 0.9% to Rs1287 and Wipro edged lower by 0.2% to Rs642. Buying was also seen across the Banking stocks. Heavyweights led from the front, ICICI Bank rose by over 5% to Rs992, SBI was up by 1.3% to Rs1197, HDFC Bank added 0.5% to Rs1109 and Kotak Bank gained 3.3% to Rs504.
Bajaj Auto gained over 9% to close at Rs 3047. A financial daily reported that the company would be split between founder Rahul Bajaj's two sons - Rajiv and Sanjiv. The paper said as part of the demerger, which has been hanging fire for quite some time, Rajiv is to get the automobile business while Sanjiv would look after the financial services & insurance business.
Sujana Metal has been in momentum attracting buying interest from FIIs. The scrip outperformed the BSE Small Cap Index, rising by over 21% to close at Rs121. The company decided to de merge both the Transmission Tower and Steel Businesses into two separate companies and is awaiting the approval from High Court. Sujana Metal also has a healthy order book. Deutsche International, Goldman Sachs and Morgan Stanley have bought the stock in huge quantity over the week. Goldman Sachs has bought over 5 lakh shares over the week. .