The Telegraph
Since 1st March, 1999
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Steel stocks sizzle, sensex spurts

Calcutta/Mumbai, Aug. 18: Frenzied buying in shares of steel companies overshadowed a broad-based rally that took the sensex — the Indian stock market barometer — 15 points shy of the magical 4,000-mark.

The shares of Steel Authority of India (SAIL) and Tata Steel (Tisco), which were the most actively traded stocks today, clocked a combined turnover of Rs 1,416.4 crore. This was about 24 per cent of the total turnover of BSE and NSE — the two largest bourses.

SAIL gained a whopping 30 per cent over Thursday to close at Rs 51.40. The steel major logged a turnover of Rs 901.17 crore on the BSE and NSE combined, or 15.35 per cent of the total turnover of the two exchanges.

With today’s gain of nearly Rs 12 — the biggest single day advance in many years — SAIL has overtaken Wipro to gain the seventh spot in market capitalisation.

Tisco followed SAIL closely with a combined turnover of Rs 515.23 crore. The share gained 6.42 per cent to close at Rs 258.65.

Even the so-called second-rung steel companies joined in the party. Essar Steel was up 20 per cent at Rs 32.75, while Jindal Iron and Steel gained 10 per cent to close at Rs 157.95.

Other gainers include Jindal Vijaynagar Steel, Ispat Industries, Jindal Steel and Power and Jindal Strips. Nearly all these stocks advanced 10-20 per cent over their previous close.

But market aficionados say the rally in steel stocks is driven to a great extent by speculative trading. Only 9.89 per cent of the 13.94 crore shares of SAIL, that were traded on the NSE today, would change hands. Transactions in the rest were squared off within the day’s trading.

Brokers said reports that steel prices would go up by Rs 1,500 per tonne fuelled the speculation. Even as the steel shares were setting the market afire, sensex shot up to 3985.46 but closed a shade lower at 3977.73 — 56.53 points or 1.44 per cent higher than Thursday. The Nifty closed 2.7 per cent higher at 1281.40.

Index heavyweights like Hindustan Lever (HLL), Reliance Industries and Infosys Technologies also posted significant gains. HLL closed at Rs 181.90, Rs 4.25 higher than Thursday, while Reliance gained Rs 2.65 to end the day at Rs 361.25. Infosys was up Rs 73 at Rs 3,489.85.

Among other major gainers were Asea Brown Boveri (ABB), Bajaj Auto and HDFC. ABB’s current close of Rs 469.50 was Rs 41.70 (9.75 per cent) higher than Thursday. Bajaj Auto gained Rs 37.20 (5.55 per cent) to close at Rs 707.35, while HDFC advanced Rs 20 to Rs 479.80.

The few losers among index heavyweights were State Bank of India (SBI), Grasim, Cipla, Ranbaxy, Bharat Petroleum (BPCL) and Zee Telefilms. While SBI closed a few paise lower at Rs 430.20, Grasim shed Rs 4.55 to close at Rs 608.25.

Cipla and Ranbaxy were marginal losers — they closed at Rs 849.10 and Rs 833.05 respectively. Zee Telefilms declined Rs 2.65 to close at Rs 115.20. BPCL was down marginally at Rs 286.70.

Foreign institutions continued to pump in money into the equity market, while withdrawing from fixed-income securities. They invested another Rs 102.1 crore in equities today, taking the total FII infusion during the month to Rs 1,178.7 crore.

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