Uncle Sam Helps to Lift the Market Sentiment-Jun 16,1999.
(Courtesy:Capital Market)
Stock prices on the Bombay Stock Exchange (BSE) recovered sharply after a dull first half. The mood on the market remained quite lacklustre in the beginning with the narrow movements in the BSE 30-Share Sensitive Index (Sensex) for the better part of the day. However, the fresh buying came in around 1.45 p.m. following the reports of Clinton Administration approving the lifting of the economic sanctions.
At the same time, following the White House's statement to the Pakistan to respect the Line of Control, there was some euphoria among the players.
The Sensex opened steady at 3922.71 and declined later marginally moving in a range of 3950-80 for some time before retreating sharply towards the mid session and touched the day's low of 3876.56.
However, around 1.45 pm as the news of Clinton Administration's formal approval to lift the economic sanctions came lifted the Sensex above 4000-mark to touch a high of 4031. Finally, the Sensex settled at 4021.40, gaining 119.67 points over its previous closing and 3901.73 points over its day's low. The BSE 100-Share National Index (Natex) also gained 39.46 points over its previous closing of 1689.28 to settle at 1728.74.
Pivotals were steady. Following the hike in the product prices once again, Reliance Industries counter was steady and touched a high of Rs 184 before settling at Rs 183. State Bank counter also recovered from lower levels and hit the upper limit of the circuit breaker at Rs 252.90 on institutional interest. Operators were reported to be covering the short positions on the bourses. Hind Lever was firm throughout the day and touched a high of Rs 2315 and settled there.
Software stocks were the major losers even today but some of them recovered later in the day on renewed buying interest. With the apprehensions about the slowdown in the growth rates of the software companies and end of Y2K business, the sentiment for the software counters has been turning bearish. 'Shares like Satyam Computer which have significant exposure in the Y2K business may lose further. However, the stocks with limited Y2K exposure would bounce back once the first quarter results start flowing in,' opined Vishal Shah, dealer, Indsec Share & Stock Broking. However, some fresh activity came in later in the day, pulling up the software counters. Satyam Computer improved from a low of Rs 1125.05 to close at Rs 1185 and Pentafour Software improved from a low of Rs 932.30 to 956.50. Selling pressure, however, continued on the second rung software counters.
Among others, Mahindra & Mahindra (Rs 272.25) and Ranbaxy Laboratories (Rs 597) hit the upper limits of the circuit breaker on the BSE.
Ashok Leyland was also firm counter continues to remain firm on institutional buying. Essar Steel was firm on improving steel industry scenario and Essar Oil was looking up following the BPCL's interest in Essar Oil's equity. Aluminium stocks were steady following firming aluminium prices on the London Metal Exchange (LME). Hindalco improved to Rs 633.50 and Nalco to Rs 39.10. Other metal stocks like Tata Steel (Rs 132.50) and Sterlite Industries (Rs 213.50) were also firm. Cement shares also recovered from lower levels as fresh buying came in. ACC closed at Rs 182.75, Larsen & Toubro at Rs 307.85, Gujarat Ambuja Cements at Rs 330.75 and Madras Cements at Rs 4707.20.
Recovery was seen on select pharmaceutical counters like Dr Reddy's Laboratories, Novartis and Ranbaxy laboratories.
With the White House's advice to Pakistan to respect the Line of Control, the things are looking up. As things are expected to change for better on the political front, players do not expect market to come off very significantly from the current levels. The optimism is building up. If Pakistan takes the US advice seriously, Sensex is expected to see a gain of couple of hundred points from these levels. |
