The Hindu Business Line : Buying in pharma, auto stocks spurs Sensex rally

Markets opened flat on Friday but gained momentum later to clock gains, undaunted by mixed trends exhibited by its global peers. Markets scaled a three-and-half month high after a smooth rolling over of the August derivative contracts. The withdrawal of the draft public offer document by DLF did not seem to dampen market sentiment.

The day's rally could be attributed to buying in the pharma and auto stocks. Their respective indices recorded an intra-day gain of over 2 per cent.

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Selective buying was seen in mid-caps and banks. Buying was conspicuous among index heavyweights, with all but six stocks ending in positive territory. Foreign investors were net buyers to the tune of Rs 179.71 crore.

Buzzing Stocks

Moser Baer posted a 6.7-per cent gain for the day. The stock saw volumes almost three times its two-week average. The other gainers for the day were Ashok Leyland, GAIL, IL&FS Investmart and JP Hydro. Gokaldas Exports gained 7 per cent. iGate Global Solutions and Gati were amongst the other prominent gainers for the day. Zee Telefilms jumped 4.6 per cent on huge volumes. The stock had plunged 5 per cent on Thursday following TRAI's announcement on pay-channel rates.

Sector Focus

The Auto index led the charge among sectoral indices after reports came in that the Government will not hike fuel prices further. Major gainers were Ashok Leyland, Tata Motors and Eicher.

The two-wheeler segment also witnessed buying after their monthly sales numbers were announced. Bajaj Auto and TVS Motors surged 3.5 per cent each.

The pharma sector saw buying across the board. Orchid Pharma, Sun Pharma, Cipla, Ranbaxy, Dr. Reddy's and Glaxo saw heavy buying. Divi's Laboratories recorded a gain of almost 7 per cent to close at Rs 1,917.

Banks also witnessed selective buying. Indian Overseas Bank posted an intra-day gain of 4 per cent.

Other scrips to gain in this space were HDFC Bank, Canara Bank and UTI Bank. ICICI Bank gained 2 per cent on strong FII interest. Temasek and GIC (both of Singapore) had shown interest in picking up a 20-per cent stake in the bank.

Steel stocks surged marginally despite producers announcing a cut in metal prices. SAIL gained 1.2 per cent; Tata Steel posted a gain of 1.1 per cent.

Stock-specific action

DCW spurted 12.9 per cent after it announced its Rs 525-crore capex plans. The company is aiming at expanding capacities and profitably using its by-products.

Strides Acrolab gained 3.9 per cent after it entered into an agreement with Haw Par Healthcare of Singapore. This would help the company get a 100-per cent stake in Drug Houses of Australia (Singapore) for a consideration of $19.7 million (Rs 90 crore).

Hinduja TMT plunged 4 per cent after its board approved the demerger of its IT services division into a separate company.

Gainers and Losers

Other gainers were Orient Paper, McLeod Russel, Paramount Communications and Minal Jewels. Losers included Torrent Pharma, Apollo Tyres and Binani Industries.