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Rediff.com  » Business » Late recovery help markets end higher

Late recovery help markets end higher

November 18, 2010 16:16 IST

BSESharp recovery helped by easing in food inflation as well as strong Asian stocks, saw the markets ending in the green on Thursday.

The Sensex, after a firm start dropped to a low of 19,616. The index rebounded thereafter, and traded within a range for some time.

The Sensex finally ended at 19,931 -- up 66 points.

The Nifty, after dropping below the 6K mark on Tuesday, once again gained strength. The index, after flip-flopping between the zones ended finally at 5,999 - up 10 points.

India's annual food inflation eased for the fifth consecutive week in early November, probably due to new crop arrivals in the market, lending support to expectations that the central bank would hold rates steady in the near term.

The food price index in the year to November 6 rose 10.3%, compared with 12.3% in the previous week.

However, the BSE mid and small-cap indices languished in the red. The mid-cap index dropped 0.3% to 8,241. Small-cap index was down over 1% at 10,455.

Splash Media, Himachal Futures, Coral Hub, JVL Agro Industries and MSK projects were some of the small cap losers.

BSE auto index jumped 1.5% to 10,123. Hero Honda jumped 1,913. Other auto stocks are in green. Maruti Suzuki and Tata Motors added 2% each to Rs 1,429 and Rs 1,231, respectively.

"The auto story will continue for some time, while auto ancillaries have not gone up sharply like other auto stocks," says Mehraboon Irani, Sr. VP-Equity, FCH Centrum Wealth Managers.

Metal stocks jumped as prices increased in the London Metal Exchange. BSE metal index was up 2% at 16,891. Hindalco surged 5% to Rs 222. Sterlite rallied 2.6% while Tata Steel jumped 3%, respectively.

However, realty and bankex were down around 1.5% each.

India's exports in October 2010 rose an annual 21.3% to $18 billion, while imports for the month grew 6.8% on the year to $27.7 billion, Government officials said on Monday.

OMCs rose as crude oil prices declined. BPCL jumped over 2% to Rs 740. HPCL gained 1% at Rs 465. IOC was 2% at Rs 397.

Asian markets ended higher. The Hang Seng jumped 1.8% to 23,637. Nikkei gained 2% at 10,013. Seoul Composite and the Shanghai Composite also went up over 1% each.

In Europe too, markets are trading in the green. On Wednesday, Britain offered to help Ireland to get over the eurozone crisis by providing fund over and above what it gets from the European Union. Globally, investors would be watching Spain's bond auction which would take place later in the day.

Telecom stock, Reliance Communications crashed after reports that the company benefitted the most from the arbitrary and unfair manner in which licences were given in 2008 were submitted by the CAG. RComm slumped 5% to Rs 154.

Axis Bank's board of directors unanimously approved the acquisition by Axis Securities and Sales, a wholly owned subsidiary of the company, of the financial services business of Enam Securities, on Wednesday. The stock fell 3% to Rs 1,427.

"In our opinion, this deal is strategically important for Axis Bank as it fills a gap in offering a complete suite of products to its retail and corporate clients. However, in absence of finer financial details, we are keeping financial projections unchanged," says Kotak Securities.

Cipla and Bharti Airtel added around 4% each.

Larsen & Toubro, Infosys, Jaiprakash Associates and ITC were among the other gainers. Reliance was marginally at Rs 1,033.

Meanwhile, ICICI Bank shed 3% at rs 1,165. Tata Power and ONGC dropped over 1% each.

BSE market breadth was weak. Out of 3,085 stocks traded, 1,872 declined while 1,065 advanced.

BS Reporter in Mumbai
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