Sensex Rebounds 2.3%, IT, Reliance Rally

Ivaylo
06 Mar, 2007
New York City

The benchmark index ended in positive territory despite the high volatility, supported by a surge in large-caps and Reliance Industries in late afternoon. Short-covering in derivatives and strong Asian markets also aided the rally. Wipro, ICICI Bank and Infosys led the gainers, while Hindalco and NTPC led the decliners. The rally, however, was not broad-based. The rupee was steady against the dollar. The government has been urging steel and cement industries to control prices.

[R]8:00AM NY-7:00PM Mumbai Sensex bounces back on a rally in IT stocks, Reliance.[/R]
The Sensex on BSE finished 282.05 points, or 2.27%, higher at 12,697.09. The market-breadth was stronger than Monday’s, but still negative. For every three decliners, there were two advancers. As 1,459 stocks declined, 1,080 advanced and 45 remained unchanged. Of the 30 stocks in the Sensex, 22 advanced while the rest declined. The turnover on BSE was Rs 3,807 crore, lower than Rs 3,996 crore on Monday. On NSE, the turnover was Rs 8,361.27 crore, compared with Rs 8,550.91 crore on Monday.

Economic news

Finance Minister Chidambaram told parliament that the government will continue to take fiscal and monetary measures to curb inflation and undertake steps to relieve supply side pressures.

The rupee was steady against the dollar at 44.40 after plunging yesterday as foreign funds sold equities to raise its level against the U.S. dollar.

Corporate news

GE Energy Financial Services, a unit of General Electric, announced on Tuesday it will lend $17 million to Indian cement maker Binani Cement Ltd. to construct a power plant in the western state of Rajasthan.

Trading highlights

Reliance was the most-active stock with a turnover of Rs 151.40 crore followed by Reliance Communications and Tech Mahindra.

Advancers

IT stocks surged as the recent fall of the rupee sparked renewed buying for IT shares. The rupee’s decline will ease pressure on their profit-margins Wipro soared over 8% to Rs 581. Infosys surged 5.5% to Rs 2,116. Satyam surged 4.9% to Rs 434, and TCS added 3.2% to Rs 1,199.

ICICI Bank surged 3.8% to Rs 851.6. The stock has 9.3% weightage in the Sensex. Reliance Industries also rallied 3.2% to Rs 1,299.4 and helped the overall recovery of the market. The stock advanced on bargain-hunting after a recent steep decline.

Cement shares rebounded as well from the lower level in volatile trade. ACC surged 5.1% to Rs 854.4, Grasim gained 1.4% to Rs 2,133 and Gujarat Ambuja Cements gained 1.7% to Rs 113.80. Steel large-caps came off from an intra-day decline. State-run Steel Authority of India gained 1.2% to Rs 98.20, off the session’s low of Rs 91.50. Tata Steel closed flat at Rs 421, off the session’s low of Rs 404.55.

Bharti Airtel surged 4% to Rs 718.5 and L&T gained 3.2% to Rs 1,427.6. The stock rose on bargain-hunting after a recent steep decline. Toshiba, biggest maker of nuclear power generation machinery in Japan, announced it is negotiating with Larsen to jointly manufacture coal-fired power equipment.

Decliners

Hindalco plunged 3% to Rs 130.10 and NTPC shed 2.7% to Rs 133.10. The board of NTPC approved a proposal for the entry of the company into nuclear power generation. Tata Motors declined 1.4% to Rs 726.30 and Hindustan Lever lost 1.2 % to Rs 171.40.