Bulls snap five-week losing streak
I'm a survivor
I'm not gonna give up
I'm not gon' stop
I'm gonna work harder
Even as India prepares to take on Sri Lanka in a ' do- or- die' encounter in the Cricket World Cup, the bulls on Dalal Street managed to rebound from a month's downturn. After being on the receiving end for the past five weeks, the bulls finally got some respite this week. In a broad-based rally, the benchmark BSE Sensex surged by 6.88% or 855 points to record its biggest gain since 21st April, ending the week at 13286. Buying was seen in counters lie Telecom, Oil & Gas, Capital Goods, Banking, FMCG and Auto. Short covering of positions in the F&O segment also contributed towards this week's turnaround. Also, value buying by investors after the 15% fall from the all-time high of February powered the rally. BHEL, HLL, SBI, L&T and Bharti Airtel were the major gainers among the 30 Sensex stocks. The NSE Nifty added 7% or 252 points to close at 3861.
Markets across US and Asia provided good support after Bank of Japan and the Federal Reserve kept interest rates unchanged. The Fed also unexpectedly abandoned its tilt towards higher borrowing costs, indicating that it may well cut rates if the need arises.
Despite the uncertainty over the cement prices, cement stocks bucked the negative trend and closed higher. The Finance Minister met cement makers this week over the sticky issue of prices, but the talks didn't make much headway. Meanwhile, reports said that the Government was mulling a five-year tax holiday for cement companies putting up fresh capacity. ACC surged by over 3% to Rs745, Grasim rose 3.3% to Rs2071, Gujarat Ambuja was up by 1.4% to Rs105 and Mangalam Cement added 3.1% to Rs148.
Telecom stocks climbed after telecom regulator TRAI cut ADC on international calls. Also, the Cabinet approved revised norms for allowing 74% FDI in telecom. RCOM and Bharti Airtel were among the major gainers. Bharti surged 9.2% to Rs783, R Com rose over 11% to Rs425 and MTNL was up by 2% to Rs145. Spurred by reports of land sale, VSNL rose by over 8.5% to Rs406. However, the company denied such developments.Banking stocks outperformed the key indices after the money market situation eased and public sector banks called of next week's big strike. Outcome of the BOJ meet and Fed's remarks on interest rates also brought the banking stocks back in action. Heavy weights led from the front. SBI was the top gainer among the Banking stocks. The scrip jumped by over 12% to Rs1027, HDFC Bank rose by over 11% to Rs1011 and ICICI Bank added 10% to Rs894. Among the mid-cap banks, UTI Bank, PNB and Kotak Bank were the major winners.
Value buying was seen in Capital Goods stocks after the recent massacre. Also, industrial production, which grew more than expected in January to 10.9%, contributed towards the gains. BHEL was the top gainer among the 50 stocks in the Nifty amid market grapevine of a big order from ONGC. The scrip rose by over 16% to Rs2279. L&T followed suit. The scrip rallied by over 12% to Rs1632, Punj Lloyd was up by 8% to Rs832 and Siemens added 6.3% to Rs1080.
Auto stocks were in top gear. Maruti paced ahead by over 7.5% to Rs839. The company hiked prices of the Swift diesel and the Government said it would sell its residual stake next year. Tata Motors was up by 5.3% to Rs789, Hero Honda surged 4.1% to Rs679 and Bajaj Auto added 1.7% to Rs2533.
ITC was the sole loser among the index heavyweights over the week after West Bengal and Maharashtra decided to levy 12.5% VAT on tobacco products. Concerns on VAT along with the excise duty increase in the budget would have a negative impact on the profit margins of the company, analysts said. The scrip lost 0.5% to close at Rs144.
Reliance Industries zoomed over 6% to Rs1380 after hitting a high of Rs1420 and a low of Rs1297. Reliance said it had tied up with Rohm & Haas Co. to build a plant in Jamnagar to make chemicals used in paints and plastics. Also, there were reports that Reliance may spend US $12bn to buy a majority stake in a venture with Dow Chemical.
BHEL was a power performer. The stock gained by over 16% to close at Rs2279. The scrip hit a week's high of Rs2315 and a low of Rs1957. The stock witnessed sustained rise in its delivery volume over the week, indicating heavy buying interest. There were reports that the company may win an order from ONGC to supply equipment for oil rigs.
Ranbaxy attracted a lot of attention over the week after the company pulled out of the bidding for the generic unit of Germany's Merck citing expensive valuation. The scrip rose over 4% to Rs330 hitting the week's high of Rs350 and a low of Rs315.