Heavyweights push...

Markets added further to its earlier gains in the final hour of trade today as buying strengthened among index heavyweights. Participants' interest in key stocks from the auto, banking, commodity, engineering and software sectors also aided the upward momentum right through the close of trading.

The BSE Sensex closed at 6,606 (up 56 points) and the Nifty closed at 2,073 (up 20 points). The rupee was trading at Rs 43.76 per US Dollar.

Today was a strong day at the bourses with market participants opting to bargain hunt stocks that had been beaten down in the past few trading sessions. While trading began on a cautions note, a strong upward momentum soon set in taking the Sensex well past the 6,600 levels. Major gainers among the Sensex stocks were Zee Tele (ZEE.BO, news) (6%), Reliance (3%) and HLL (2%). Leading the few losers' pack were, however, Bharti Tele (BTEL.BO, news) (2%) and Bajaj Auto (BJAT.BO, news) (2%). Going forward, we reckon, that a clear trend would emerge only after the quarterly results are through.

Market participants seem to be fickle with regards to investing in the software sector at the current juncture as most of the major players (Infosys, MphasiS and Geometric) are scheduled to announce their full-year results within a week's time. This fact is well vindicated by the mixed interest that stocks from the sector have witnessed in the past few trading sessions. Even today, while gains were seen in Flextronics (2%), TCS (1%) and Infosys (1%), others like i-flex (1%), MphasiS (1%) and HCL (HCLL.BO, news) Tech (1%) took the beating.

Stocks from the engineering sector closed on a mixed note with major gainers being Crompton Greaves (4%), BHEL (1%) and L&T (1%). On the other hand, selling was seen in ABB (1%) and BEML (3%). Gains in the PSU engineering major, BHEL (BHEL.BO, news) were seemingly a result of newspaper reports that the company has bagged an order worth Rs 14.6 bn from a joint venture project of NTPC and SAIL. As per the deal, BHEL will set up two 250 MW power stations for the Bhilai Electric Supply Company, which is the thermal power project set up jointly by NTPC and SAIL. BHEL will design, manufacture and commission the main plan package including balance of plant and civil works on a turnkey basis. The company has secured this order by outbidding a Chinese firm besides other domestic firms. The company's order book now stands at Rs 318 bn, almost 3 times its provisional revenue figure of FY05 (Rs 105 bn).

Mixed activity was also seen in stocks from the domestic pharma sector where major gainers included Matrix Labs (4%), Nicholas Piramal (1%) and Ranbaxy (1%). Glenmark Pharma (2%) and Wockhardt (1%), however, led the losers' pack. Gains in the pharma major, Nicholas Piramal (NPIL) were despite the company's announcement that its domestic formulations sales have been adversely affected in the January-March quarter of FY05. The company has attributed this to down stocking by wholesalers and retailers because of VAT-related concerns and also to retail chemists' strike regarding psychotropic/narcotic drugs. The company estimates that it may have lost approximately six weeks of domestic formulation sales owing to these reasons.

Telecom stocks, with the exception of Bharti Tele (down 2%), closed today in the positive. Major gains were seen in Tata Teleservices Maharashtra (4%), VSNL (1%) and MTNL (1%). The beating that Bharti got on the streets was despite earlier reports that the company is planning a capex of Rs 42 bn in FY06. Of this amount, two-thirds would go towards expansion in the mobile business, which contributes around 62% to its revenues. The balance will go into other businesses such as fixed line, long-distance and broadband. The management has indicated that the funding will be through a combination of debt and internal accruals. It must be noted that the company has already spent Rs 33 bn on capex in the period to 9mFY05, and this has helped it continue its dominance on the Indian GSM market.

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