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The day saw all major indices making history by closing at all time highs.
The fact that FII's made net purchases of more than Rs500 crore on March 1
— the day after the budget when the market actually fell — spread
all round optimism in the market. The rally was broad based with as many as
three frontline stocks, SAIL, ICICI Bank and SBI, hitting new 52-week highs
Morning
trade belonged to super heavyweights ONGC and Reliance while tech stocks led
by Infosys brightened late afternoon trade. Sensex closed at 6785, up 98 points
and the Nifty at 2129, a gain of 36 points. Nifty futures closed at 4 points
premium to the spot index. As
expected, Fed Reserve chairman Greenspan made positive statements on the US
economy in his Congressional testimony. While projecting a relatively stable
outlook for the US dollar he said there is little evidence that central banks
of other countries are dumping the dollar. Nymex light crude rose to $53 to
a barrel and pulled down US markets. Both Dow and NASDAQ closed with losses.
Among Indian ADR's, HDFC Bank and ICICI Bank were major losers. Infosys and
Wirpo lost more than 1 per cent each while Satyam, Tata Motors, VSNL and MTNL
managed marginal gains. Today's
rally was led by index heavyweights ONGC and Reliance. Both stocks have been
underperformers over the last few months, ONGC on fears of subsidy burden
and declining oil prices and Reliance on the fight for control by Ambani brothers.
ONGC gained more than 3 per cent on hardening oil prices and on upward revision
of estimated gas reserves in the Krishna-Godavari basin. The company is also
hopeful of new gas discoveries in the KG-1 basin, which is adjacent to the
KG-6 basin where Reliance had struck gas reserves. ONGC Videsh has won a contract
for development of an offshore oil field in Qatar. Reliance gained close to
2 per cent. Auto
stocks were much in demand with Tata Motors leading the pack. The company
has unveiled a new cross-over vehicle prototype aimed at the European markets
in the ongoing Geneva motor show. Ratan Tata, chairman, Tata Motors, also
revealed that the much anticipated Rs1-lakh small car project is well on track
and the company aims to become the largest player in the Indian market. The
company recently launched its small car Indica in South Africa and Turkey.
Hero Honda announced launch of a new bike aimed to fight off the challenge
to its market leadership from Bajaj. It may be recalled that the two-wheeler
companies had reported robust volume growth for February. PSU
banks led by SBI and Bank of Baroda made impressive gains. Union Bank ended
with losses after the stock reached its FII limits and the RBI banned further
FII buying. ICICI Bank continued its uptrend even though its ADR fell more
than 2 per cent yesterday. Consumer
goods major HLL (now renamed Unilever India) was a major gainer on anticipation
of robust consumer demand post-budget. There was a major block deal of 2 million
shares in HLL. Dabur India touched an all-time high. Steel stocks also made
impressive gains led by Tata Steel and mid-cap steel also closing firm. Mid-cap
action
The CNX mid-cap
index also closed at an all time high of 2847. Bombay Dyeing led the mid-cap
rally with gains of close to 15 per cent. Other textile stocks also fared
well after US garments major VF Corp indicated more sourcing from Arvind Mills.
Escorts gained on news of the company bagging a tractor order from Ghana,
worth around $9 million. Eveready Industries gained on news of the Calcutta
High Court approving its scheme of de-merger. Smaller paper stocks continued
to rally even as market leader Bilt corrected. Coking coal manufacturer Gujarat
NRE Coke was a major gainer after the company indicated that it expects demand
to grow exponentially. Crompton
Greaves made smart gains on recommendation by foreign brokerage CLSA. Crompton
Greaves had announced its take over of a Belgian transformer manufacturer,
which will open up western markets including US. Opto Circuits indicated plans
for a US acquisition. Construction stocks were all the rage with Gammon India
gaining 10 per cent and Hindustan Construction gaining more than 6 per cent.
The latter announced an order from National Highway Authority worth Rs400
Crore. Mid-cap steel stocks also saw good action. Shaw Wallace may see some
action tomorrow on rumors of a counter offer to the hostile bid by UB group. Asian
markets generally traded firm except for Taiwan, Thailand and Malaysia. Japanese
markets continue to seek higher ground after hitting an 8 month high yesterday.
European markets gave a mixed trend in opening trades with London trading
firm while mainland indices opened in the red. European Central Bank is meeting
to decide on interest rates on the backdrop of lower growth forecast in Eurozone,
especially Germany. US markets may see a bounce back if oil cools off in US
trades. Our
market should see a positive opening tomorrow and may see  some
profit booking later in the day. The market has broken a 3 month trading range
and the momentum should see it seek higher ground.
*Disclaimer:
The author doesn't have any position in the stocks specifically mentioned
above at the time of writing this article. This analysis/report is only for
the purpose of information and is not an investment advice. Readers are advised
to consult a certified financial advisor before taking any investment decisions.
While efforts have been made to ensure the accuracy of the information provided
in the content the author or publisher shall not be held responsible for any
loss caused to any person whatsoever. Other
articles by Rex Mathew List
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