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Diesel deregulation cheers ONGC, RIL; Sensex up 146

Stocks made a smart recovery on Thursday, with the Bombay Stock Exchange's (BSE) 30-share Sensex rising 146 points to close at 19964.03 points on heavy buying in Reliance Industries Ltd (RIL) and ONGC as diesel prices were virtually deregulated in a key economic reform measure.

After losing 169 points on Wednesday on Reserve Bank of India (RBI) Governor D Subbarao tempering the rate cut hopes, the Sensex on Thursday shrugged off weak initial cues after oil marketing companies (OMCs) were authorised to make small price correction in diesel from time to time.

The 30-share Sensex closed with a gain of 146.40 points to settle at 19,964.03 points as Reliance Industries Ltd and ONGC jumped by over 3 per cent each. The broad-based National Stock Exchange (NSE) index's Nifty rose by 37.35 points (0.62 per cent) to at 6,039.20.Refinery giants, ONGC and Reliance Industries were the top gainers from the Sensex and contributed more than 80 points to the index rise. IOC, HPCL, OIL and BPCL also gained.

'...a step in the right direction as it will help the government to reduce pressure on the fiscal deficit. Both upstream and downstream public sector undertakings (PSUs) will stand to gain,' stated Motilal Securities. Diesel prices were expected to be hiked in the first instance as early as Thursday following the government decision that might prune the subsidy bill. Realty and information technology (IT) stocks too attracted good buying support.

Tata Motors, Bharti Airtel, Infosys, HDFC Bank, State Bank of India (SBI), TCS, ITC and Wipro notched up handsome gains. Information technology  stocks gained after HCL Technologies, which rose 4.3 per cent, reported a 68.5 per cent jump in its net profit for the December quarter. Telecom majors Rcom and Tata Teleservices rose around 2 per cent each after the government approved a 50 per cent reduction in reserve price of spectrum used by CDMA operators. Sentiment was also boosted following consistent buying by Foreign Institutional Investors (FIIs) of shares worth net Rs 1,029.50 crore on Wednesday.

Most Asian stocks ended lower as key indices in Hong Kong, South Korea, Singapore, China and Taiwan declined by 0.07 per cent to 1.09 per cent while Japan's Nikkei inched up by 0.09 per cent. European markets too were trading narrowly mixed as indices in London and Germany eased by 0.03 per cent and 0.34 per cent while France (CAC) moved up by 0.36 per cent. CNI Research Ltd Chairman & Managing Director (CMD) Kishor P Ostwal said, 'Nifty futures closed at 6,052 after touching high of 6,066. Oil stocks were the theme of the day." Investors are now awaiting the third quarter earnings from Reliance Industries Ltd and ITC on Friday, said dealers. Overall, 19 of the 30 Sensex-based scrips closed with gains while 10 finished with losses. Sterlite Ind ruled steady. Major gainers from the Sensex were ONGC (3.66 per cent), RIL (3.40 per cent), Bharti Airtel (3.36 per cent), Tata Motors (2.27 per cent), Wipro (2.63 per cent), SBI (1.46 per cent), TCS (1.05 per cent), HDFC Bank (0.96 per cent) and Infosys ((0.91 per cent). However, Cipla dropped by 2.09 per cent, followed by ICICI Bank (1.39 per cent) and Bajaj Auto (1.14 per cent).

Among the sectoral indices, BSE-Oil&Gas rose by 3.11 per cent, followed by BSE-Realty (2.05 per cent), BSE-Teck (1.60 per cent), BSE-PSU (1.41 per cent) and BSE-IT (1.36 per cent). The total market breadth continued to remain negative as 1,137 stocks ended lower while 1,101 closed higher. Some 782 scrips held unchanged.The total turnover improved further to Rs 2,504.48 crore from Wednesday's Rs 2,462.41 crore.
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