New-economy stocks punctuate rally

Krishnan Thiagarajan

BRINGING an end to an eventful year, the broad-based and composite BL -250 Index ended on a positive note.

The BL -250 Index appreciated by 2.2 per cent to close for the week at 1197.48 points. It was a week in which technology stocks dominated the trading activity, initially dampening sentiment and latter aiding the rally. Much of the appreciation notched up the BL-250 is attributable to the software stocks punctuated the sharp rally towards the latter half of the week.

Among the sectoral indices, the Capital Goods Index was the biggest gainer during the week appreciating by 7.9 per cent. This rise in the Capital Goods Index was rather unusual as there were hardly any fundamental developments to warrant this sharp uptrend. Clearly, value buying in key counters such as BHEL, Thermax and Wartsila NSD, bolstered the Capital Goods Index during the week.

In an unusual trend, all the sectoral indices ended in the positive territory. The other key sectoral gainers during the week were Consumer Confidence Index, Bank & FI Index and MNC Index which appreciated by 2.5 per cent, 2.2 per cent and 1.8 per cent respectively.

Among the industrial indices, the major gainers during the week were Engineering - Electrical and Power Equipment - 9.5 per cent, Automobiles - CJT - 8.6 per cent, Steel - Integrated - 6.6 per cent, Power - 6.5 per cent and Engineering - Engines and Power Plant - 6.4 per cent. The industrial indices which ended up at the bottom of the charts were Chemicals - Inorganic - (4.2) per cent, Engineering - Tools - (4.1) per cent, Plantations - (2.2) per cent and Shipping - (1.4) per cent.

Apart from the sectoral and industrial indices, it was the gains in individual stocks which hogged the attention of the market during the week. Among the top ten gainers were Escorts - 34.9 per cent, Hughes Software - 29.8 per cent, Bausch & Lomb -26.1 per cent, Himachal Futuristic - 15.4 per cent, Thermax - 14.7 per cent, Wartsila NSD India - 14.3 per cent, Corporation Bank - 14.2 per cent, BHEL - 13.7 per cent, Tata Power - 11.8 per cent and Global Tele-Systems - 10.7 per cent.

As the individual gainers show, most of the trading activity was dictated by either value-buying or speculation. In the TMT triad, the sharp decline in the stock price of Hughes Software, Himachal Futuristic and Global Tele-Systems, below levels warranted by fundamentals, induced some bargain buying in these counters. Much of the same bargain buying trend was also in evidence in engineering stocks such as Thermax, Wartsila NSD India and BHEL. The buying interest in the Escorts stock was triggered by research reports indicating the stock as a good buy at current levels.

The biggest losers during the day were Mastek - (32.8) per cent, Archies Greetings - (16.9) per cent, CMC - (8.3) per cent, Widia - (7.7) per cent, Indo Rama Synthetics - (7.3) per cent and Colour Chem - (6.9) per cent.