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S. Muralidhar

DIVERSE factors such as a continuation of the rally in information technology stocks, renewed buying by foreign institutional investors and a revival of hope amongst the investing community that the stalled disinvestment programme will be recommenced, led to another day of strong showing by the Bombay Stock Exchange (BSE) Sensitive Index (Sensex) on Monday.

Starting the trading week on a bullish note, the Sensex jumped 1.29 per cent on Monday to close at 3,270.36 points. The Sensex settled down to a 41.54-point rise after the index touched an intra-day high of 3,277.37 points. Monday's session recorded total traded volumes of 12.36 crore shares. A total of 1,236 shares were seen closing higher, while as many as 307 closed lower.

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The National Stock Exchange's (NSE) Nifty index, which is more technology-heavy, gained even more than the BSE Sensex from Monday's rally and closed up 1.69 per cent at 1,067.9 points.

Monday's rise in stock prices was led by information technology shares. Sector heavyweights such as Infosys Technologies and Wipro were in the limelight based on stronger indications about a potential recovery of the US economy next year. Another reason for a broader rally in IT sector stocks on Monday was the increase in FII inflow into the sector and the strong showing by US stock indices such as the Nasdaq Composite and the Dow Jones Industrials. Indicating the increased inflow of funds, latest figures provided by the Securities and Exchange Board of India put the cumulative net investments by FIIs till November, for this year, at Rs 2,987 crore or $613 million. Backed by the tech-rally, the BSE Teck Index went up by 26.21 points on Monday.

Satyam Computer led the increase in IT sector stocks at Rs 290.85, the stock had gained 5.67 per cent. Wipro went up by 2.44 per cent at Rs 1,727.30 and Infosys Technologies was seen up Rs 96.05 at Rs 4,653.45. Other prominent gainers in the sector included HCL Technologies, up 1.49 per cent at Rs 194.10, Digital GlobalSoft, up Rs 26.15 at Rs 623.30, CMC, up Rs 12.90 at Rs 438.20, PSI Data Systems up Rs 11.50 at Rs 102.40 and GTL, which went up by 6.24 per cent at Rs 96.15.

Monday's rally was also fuelled by automobile sector stocks, particularly two-wheeler stocks, thanks to a substantial increase in performance by the top three companies in the sector during November. Companies such as TVS Motor, Bajaj Auto and Hero Honda have reported a year-on-year increase in sales of 69 per cent, 32 per cent and 20.6 per cent respectively. On the BSE, while TVS Motor closed 3.99 per cent higher at Rs 499 on Monday, Bajaj Auto met with profit-bookings at higher levels and closed lower at Rs 476.90, down by Rs 2.25. Hero Honda's stock price remained unchanged and LML closed higher by 4.44 per cent at Rs 41.20.

Select old economy stocks in the core sector were also in the limelight on Monday. These were led by ITC, which had been maintaining a low profile during the past few days. Monday's trade saw ITC gain by Rs 15.25 or 2.4 per cent to close at Rs 651.05. Steel Authority of India also sought higher levels, to close at Rs 9.05 after rallying by 5.85 per cent. HLL closed marginally higher at Rs 173.10 and Mahindra & Mahindra continued its rally of the previous week to close at Rs 107.15, up 1.23 per cent. However, Tata Steel and Tata Engineering, top Tata group companies, settled at lower levels after profit-bookings pruned earlier gains.

Finally, Monday's rise was also abetted by a significant, across the board rise in the prices of public sector undertakings' (PSU) stocks. The PSU stock rally was stimulated by the wide spread perception that with the near expiry of the three-month postponement that the Government had announced for kick starting the disinvestment programme in key PSU companies such as HPCL, BPCL and SCI, a new strategy and schedule will soon be announced.

With the increased likelihood of a renewed disinvestment related demand, shares such as HPCL, BPCL, SCI, Dredging Corporation, ONGC, IOC and Gas Authority spurted on Monday. Media reports about the possibility of Hindalco bidding for the proposed Nalco disinvestment, also led to a hike in the latter's share price on Monday.

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