Sensex above 9800 as steel, banking, engineering and auto stocks surge

The indices opened on a strong note, helped by the rally in the US markets and select Asian markets. The Sensex opened close to the 9800 mark and crossed that level for the first time ever in early trades.

From then on both the Sensex and the Nifty sustained the up trend and the afternoon session saw some frenzied buying in large caps.

Sensex saw a new lifetime intra-day high of 9884 and the Nifty recorded a new high of 2990. Both indices ended the day at new lifetime closing highs.

Reports of an acquisition bid for Arcelor, the second largest steel company in the world, by Mittal Steel sent steel stocks soaring. If concluded, the deal would further consolidate Mittal Steel's position as the largest steel maker globally. Some analysts reckon that this would give considerable pricing power to Mittal Steel which would in turn keep international steel prices high.

Tata Steel was the biggest gainer as it would benefit the most from firm prices. The stock closed with gains of close to 9 per cent.

Disappointing quarterly numbers could not hold back SAIL, which added over 6.5 per cent. Smaller steel stocks like JSW, Essar and Ispat also saw strong gains.

The gains in steel stocks lifted aluminium stocks as well. Nalco added over 5.5 per cent while Hindalco closed more than 1.5 per cent higher.

Engineering and capital goods stocks continued their up trend from the previous sessions, once again led by L&T. The stock added over 4.5 per cent. Siemens gained over 4 per cent while ABB closed more than a per cent higher. BHEL also gained over 2 per cent.

Auto stocks also maintained their up trend with all major stocks closing with strong gains. Tata Motors added over 2 per cent while Maruti gained close to 3 per cent. Among the 2-wheeler stocks, Bajaj Auto added nearly 3 per cent while Hero Honda gained over 1.5 per cent.

Technology stocks had a mixed day today. Infosys was the clear winner in this space as the stock closed more than 2.5 per cent higher. Satyam added nearly 2 per cent while TCS closed with gains of around 0.5 per cent each. Wipro lost over 0.5 per cent.

Banking stocks came back with a vengeance, led by the bigger stocks ICICI and SBI. ICICI Bank added close to 4 per cent while SBI closed more than 3 per cent higher. PNB gained more than 4 per cent. HDFC Bank closed with gains of over to 2.5 per cent while home loan major HDFC added over 1.5 per cent.

Zee Tele, ITC and Dr. Reddy were among the major losers in index stocks.

Sensex closed at 9871, a gain of 185 points, and the Nifty at 2983, higher by 43 points. Nifty February futures closed at a discount of 3 points to the spot index.

US indices rallied on Thursday as optimism about corporate performance returned after the announcement of good results from select companies. The Dow closed nearly a per cent higher while gains on the S&P 500 were lower three-fourths of a per cent.

Technology stocks were strong and the NASDAQ added nearly a per cent.

Oil prices remained subdued yesterday as well after the weekly US inventory data showed higher stocks. March futures on the NYMEX closed at $66.26 per barrel yesterday. Oil futures have bounced back in Asian trades on fresh concerns over the Iranian nuclear issue and violence in Nigeria. The commodity is trading above $67 per barrel in early European trades today.

SAIL has reported a net profit of Rs684.59 crore for the quarter ended December as compared to Rs1,514.24 crore during the prior year quarter. Total revenues were also lower at Rs6,443.39 crore as against Rs7,889.2 crore. The board has approved an interim dividend of 12.5 per cent.

Indian Oil has reported a loss of Rs5.83 crore for the December quarter as compared to a profit of Rs1,286.76 crore for the year ago quarter. Total revenues for the quarter were higher at Rs44,873.25 crore as compared to Rs37,274.05 crore.

Engineering major Siemens has announced a net profit of Rs49.02 crore for the December quarter as compared to Rs31.37 crore for the prior year quarter. Total revenues for the quarter increased to Rs861 crore from Rs513.2 crore a year ago.

The board of Siemens has approved the acquisition of a 50 per cent stake in Flender Limited, a manufacturer of industrial gear boxes. The board has also approved the acquisition of the isolator division of Elpro International. Financial details of the deals have not been finalised.

The board of Siemens has also approved the proposal for a stock split in the ratio of 5 shares of Rs2 each for every Rs10 share.

HLL has informed the exchanges that it has reached an agreement to transfer the oil brand Nihar to Marico Industries. Both coconut oil and perfumed hair oil marketed under this brand which has an annual turnover of Rs120 crore.

Mid-Cap Action

Mid-caps surged ahead today as the up trend in the larger stocks pulled them two sessions of relative under performance. The CNX Mid-Cap index gained 84 points, or close to 2 per cent, to end the day at 4343, a new lifetime high.

Pantaloon Retail's board has approved the plans for forming a joint venture and diversification into other businesses. The company said it would form a joint venture to start a chain of kids wear stores. Pantaloon would hold an equal share in this venture with apparel company Gini and Jony.

Pantaloon also said it would set up a non-banking finance company to offer financial services. The company is also acquiring one-third stakes in 2 companies making processed foods.