Post Market Commentary - March 28 2008

Sensex adds 356 points in broad-based rally

Positive cues from Asian and European markets propelled the market higher today. The rally raised hopes that the market might have bottomed out after a recent steep fall. The market today shrugged off a surge in inflation and overnight slide in US stocks. Capital goods stocks soared at the fag end of the session, followed by metal and IT stocks.

Banking shares, which hovered in negative territory on surge in inflation, turned green at the fag end of the trading session. Mid-caps and small-caps surged with their barometer indices on BSE outperforming the Sensex.

As per market talks, mutual funds provided support to share prices to prop up year-end net asset values (NAVs) for the quarter and year ending 31 March 2008. Net Asset Value (NAV) propping, or window dressing, happens as professional investors like mutual funds seek to make their quarterly or annual performance look good to clients.

Provisional data released by stock exchanges showed domestic funds which includes mutual funds and insurance firms bought shares worth a net Rs 729.50 crore today. Foreign institutional investors sold shares worth a net Rs 401.95 crore.

India's wholesale price index rose 6.68% in the 12 months to 15 March 2008, surging from the previous week's rise of 5.92%, government data showed on Friday. The rate is highest since 27 January 2007, when inflation was 6.69%.

BSE Sensex was up 355.73 points or 2.22% at 16,371.29.

CNX S&P Nifty was up 111.75 points or 2.31% at 4942.

The market breadth was extremely strong. On BSE, 2333 stocks advanced, 370 declined and 39 stocks were unchanged.

ONGC fell 1.65% at Rs 1051.55 on reports the company may report losses on every barrel of crude oil that it sells due to the high subsidy burden that it has to bear. The company’s margin on oil sales is currently at an all-time low of around 15 cents per barrel, almost a tenth of what it was two years ago, the reports added.

Reliance Industries (RIL) rose 3.19% to Rs 2347.55.

The BSE Metal index outperformed the Sensex, rising 5.78% to 14,654.19. Jindal Steel & Power (up 15.91% at Rs 2,218.65), Welspun Gujarat Stahl Rohren (up 7.12% at Rs 389.65), Ispat Industries (up 5.70% at Rs 32.45), Sterlite Industries (up 5.18% at Rs 756.15) and Shree Precoated (up 5% at Rs 171.45), surged.

Among the mid-caps, Global Broadcast News (up 23.57% at Rs 139.20), Moser Baer (20.01% at Rs 151.75), Asian Star Company (up 20% at Rs 985.85), Prakash Industries (up 18.28% at Rs 244.60) and Vishal Retail (up 17.38% at Rs 820), surged.

Among the small-caps, Nahar Industries (up 20% at Rs 90), Empee Distilleries (up 20% at Rs 169.05), Viceroy Hotels (up 20% at Rs 66.10), Donear Industries (up 20% at Rs 61.30) and Indowind Energy (up 20% at Rs 56.85), spurted.

Alembic surged 20% to Rs 55 on reports that the company plans to set up its own special economic zone dedicated to the pharma sector.

Tata Chemicals soared 6.21% to Rs 288.95 after the company said it has successfully completed the acquisition of US-based General Chemical Industrial Products Inc.

Varun Shipping surged 6.99% to Rs 72.70 after the company said it has acquired India’s third largest anchor handling and towing supply vessel.

Jupiter Bioscience soared 9.10% to Rs 148.70 after the company said on Thursday, 27 March 2008 it would acquire a manufacturing facility of Merck Life Sciences, Switzerland, for an undisclosed sum.

MIC Electronics advanced 4.23% to Rs 700.55 after the company informed stock exchange about it and its subsidiaries receiving new orders.

Era Infra rose 0.79% to Rs 596.40 after the company said its joint venture company with KMB has secured an order worth Rs 148.40 crore from Delhi Metro Rail Corporation.