Divestment moves fuel PSU stocks

Krishnan Thiagarajan

THE broadbased BL-250 composite index moved within a narrow range, appreciating by a mere 0.4 per cent at the end of the week.

The sentiment through the week was dictated largely by disinvestment moves in PSUs.

However, the Cabinet Panel, which was supposed to meet on November 10 to consider the disinvestment moves, postponed the meeting, affecting the overall sentiment on Friday. Pharma and infotech stocks also attracted market activity on a couple of days, but appreciation in them was largely sporadic.

Among the sectoral indices, the major gainer for the week was the capital goods index, which appreciated by 4.1 per cent. The other prominent gainers were PSU index, which appreciated by 2.2 per cent, and technology index, which was up by 1.20 per cent. The key losers were the commodity sector index and MNC index, which shed 2.2 per cent and 1.5 per cent respectively.

Among the industrial indices, the significant gainers during the week were paper and pulp 8.6 per cent, telecommunication-services 7.1 per cent, petroleum-refining 6.6 per cent, engineering-electrical and power equipment 6.2 per cent, tyres and tubes 5 per cent and pharmaceuticals-Indian 4.9 per cent.

The prominent losers during the week were miscellaneous 8.6 per cent, automobile-LCV and HCV 7.1 per cent, paints and varnishes 6.6 per cent, steel-flat products 5.6 per cent and cement 5.5 per cent.

The key gainers and losers among both sectoral and industrial indices were reflective of the overall state of the markets. The uptrend in the capital goods index was marked largely by an appreciation of LMW, BHEL, Cummins India, Siemens, GEC Alstom and Crompton Greaves. In much the same vein, the appreciation in PSU sectoral index was a reflection of the disinvestment moves, sparked by an uptick in VSNL, MTNL and IPCL.

The rise in paper and pulp index was led by the sharp uptrend in ITC Bhadrachalam and the relatively modest rise in Ballarpur Industries. Similarly, the telecommunication-services index marched up due to sharp surge in VSNL with MTNL tracking its PSU counterpart to some extent.

The petroleum-refining index appreciated on account of an uptrend in the private sector refining behemoth, Reliance Petroleum, and standalone refineries - Chennai Corporation (formerly Madras Refineries) and Kochi Refineries (formerly Cochin Refineries).

The poor show of automobiles-LCV and HCV index is attributable to a sharp decline in the sales of the biggest LCV/HCV manufacturer - Tata Engineering and Locomotive Company - in October of medium/heavy commercial vehicles.