Cement stocks pile gains

Krishnan Thiagarajan

ON the back of FII selling pressure, the broad-based BL-250 Composite Index slipped into the negative territory, shedding 0.3 per cent to close for the week at 1,161.66 points.

Market direction continued to remain uncertain. The movements of the Nasdaq influenced the BL-250 Composite Index and the BSE Sensex to a large extent, particularly the technology stocks. Cement stocks hogged the limelight during the week as several companies aimed to restore the demand supply imbalance by resorting to plant shutdowns for a longer time every year.

Among the sectoral indices, the two indices which ended in the positive territory were the Commodity Index and the Agri-Business Index, appreciating by 1.8 per cent and 1.2 per cent respectively.

The key losers were the Consumer Confidence Index and the MNC Index, which dipped by 3.6 per cent and 3 per cent respectively.

Among the industrial indices, the key gainers during the week were Automobile (LCV & HCV) - 11 per cent, Cement - 10.1 per cent, Steel (Integrated) - 10.1 per cent, Agrochemicals - 6.2 per cent, Steel (Flat Products) - 5.9 per cent, Air Conditioners - 5.3 per cent and Diversified - 5.1 per cent. The key losers during the week were Personal Products - 5.5 per cent, Petroleum (Refining and Distribution) - 4.7 per cent, Telecommunication Services - 4.5 per cent and Engineering (Electrical and Power) - 3.7 per cent.

The most material development of the week was the informal agreement entered into by cement producers to resort to plant shutdowns to restore the demand supply balance and keep the prices stable in the foreseeable future. This led to the Commodity Sector Index appreciating by 1.8 per cent, mainly due to an appreciation of ACC, Gujarat Ambuja, India Cements, Madras Cements.

In addition, several diversified stocks with cement capacities which gained during the week were Grasim Industries, Kesoram Industries, Birla Corp and Century Textiles.

The Agri-Business Index was another major gainer led by the likes of United Phosphorous, BASF India and Bayer India.

Besides cement and agrochemicals, the other major gainer among the industrial indices was Automobile (LCV & HCV). It was fuelled largely by the sharp rise in the price of Tata Engineering (Telco), which appreciated by 13.2 per cent to close at Rs 87.70. The appreciation in the price of Tata Steel (7.4 per cent) and SAIL (15 per cent) helped the Steel-Integrated Index appreciate by 10.1 per cent during the week.

Owing to a sharp dip in the prices of Procter and Gamble, Reckitt & Colman and Hindustan Lever, the personal products index was the biggest loser of the week, declining by 5.5 per cent.

As disinvestment moves faded in most of the PSU stocks, along with a decline in the PSU Index by 2.2 per cent, the industrial indices, with strong PSU tilt also suffered a decline. Among the key losers was Petroleum (Refining and Distribution) with Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum shedding value during the week.