Convergence stocks post marked gains

A. Srikanth

IT was convergence all the way during the week as most frontline information technology, media and telecom stocks posted significant gains.

With the exception of Thursday, both the BL 250 Composite Index and the Sensex posted positive returns on all other days. While the BL 250 Composite Index posted a net gain of 55.81 points to close at 1,285.86, the Sensex rose by 155.05 points to end the week at 4,347.04.

Along with the convergence sectors, other growth sectors too posted significant gains during the week. On the whole, the growth sectors had an upper hand on the market. As the spectre of an industrial slowdown looms large on the market, it appears that the stocks constituting the growth sectors are slowing gaining strength. Other growth sectors such as personal products and consumer products too gained significantly during the week. The food and dairy index, however, has lost value during the week.

However, if the performance of the value sectors during the week are anything to go by, no firm conclusion as yet can be reached about any sort of slowdown in the industrial production. Among the value sectors, hotels and resorts, automobiles-CJT, textiles, engineering-electrical and power equipment, packaging, petrochemicals and tyres and tubes were the major gainers.

The hotels and resorts sector was a surprise gainer during the week, even ahead of the software and hardware sectors. The sector posted a gain of 12.23 per cent as EIH posted sharp gains during the week. Other stocks in the sector, however, remained range-bound. The textile sector was another surprise gainer during the week. Though this sector has been posting marginal positive gains over the past several weeks, this is for the first time that this sector has come up in the charts. As the Bombay Dyeing stock gained significantly during the week, the textile sector went up by 6.85 per cent.

Among the convergence sectors, the hardware sector posted the biggest gains during the week as Wipro, Global Telesystems and Digital Equipment powered their way ahead. The software sector was aided by sharp gains by Infosys Technologies, Mastek, Hughes Software, NIIT and Satyam Computers. The other stocks in the sector either remained range-bound or posted marginal gains.

While Zee Telefilms was the biggest gainer among media stocks, both VSNL and Himachal Futuristic gained the most in telecom services. In personal products, both P&G and Hindustan Lever gained the most. Other stocks either remained range-bound or posted marginal declines. Similarly, in consumer products, ITC, Indian Shaving and Archies Greetings were the major gainers.

The firming up of international crude prices appears to have started having a positive impact on the share price of petrochemical stocks. The share prices of both Reliance Industries and IPCL have gone up significantly during the week.