Auto, metals, realty team up to take Sensex near 16k

Auto, metals, realty team up to take Sensex near 16k
The Economic Times, August 4, 2009, Page 11

A better-than-expected Q1 show coupled with improved sentiment in the global market helped the BSE benchmark add to its weekend tally by 254 points. Is the Street ready for another rally?

Agencies, MUMBAI

THE Bombay Stock Exchange benchmark Sensex rose to touch its highest level in more than a year on Monday. The 30-share index gained 253.92 points, or 1.6%, to end the day at 15,924.23.

The rally got support from investors’ taking long positions across the board following positive opening of the European markets and gains in auto, realty and metals spaces.

Maruti Suzuki and Mahindra & Mahindra paced gains after saying they sold more vehicles last month. Maruti Suzuki climbed 3.98% to 1469.55 while Mahindra & Mahindra gained 6.88% to close at 915.75.

Among the metal stocks, Sterlite Industries gained to a seven-week high after a measure of six metals traded in London jumped 1.7% on July 31. Tata Steel advanced 4.9% to 485.2, while Hindalco, the biggest aluminum producer in the country, jumped 8% to 108.3.

The Sensex climbed 8.1% last month as the first-quarter results of 23 of the 30 companies on the index beat analysts’ estimates.

“The good earnings by Sensex companies have added to the confidence of investors,” said Deven Choksey, CEO of KR Choksey Shares & Securities. “The markets will see an upside going forward.”

The Nifty added 1.6% to 4,711.4, crossing the 4,700 level for the first time since June 3, 2008. The BSE 200 Index increased 1.7% to 1,941.93.

An “increase in rural demand” as a result of “government spending” is helping drive demand in some sectors such as auto manufacturing, said Navneet Munot, chief investment officer at SBI Funds Management, who oversees the equivalent of $7.3 billion in assets.

Among the other gainers, Hindustan Zinc, India’s largest producer of the metal, rose 6.8% to 738.4. The company raised prices of zinc and lead after the metals jumped on the London Metal Exchange.