News Release Details
Oil & gas powers sensex's 17K rise
New Delhi 28-Sep-2007
The BSE sensex raced past the 17K milestone in just a week, as a few frontline stocks powered the index to new highs. While on the sect oral front, just two sectors oil & gas and real estate that beat the 6.3% rise in the sensex as it raced from 16K to 17K. Although IT stocks are still being hammered, thanks mainly to the strength of the rupee against the dollar, on Wednesday they performed marginally better on the back of short covering, market players said. BSE's IT Index is almost at the same level where it was when the sensex had crossed the 16,000 mark on September 19. "This has been a surprise rally, with select stocks moving higher. Mid-caps and small-caps have not kept pace with the large-caps. At this point, we are bullish on banking, power, and construction as well as infrastructure stocks," said Anil Advani, head of research, SBICAPS Securities. Among BSE's sect oral indices, the oil & gas sector was once again the top gainer in this 1000-point rally, on the back of substantial gains in its heaviest stock Reliance Industries, which moved up 7% since last Tuesday. Reliance Petroleum also rose by 16% during the week while ONGC gained4% to further push up the index. These three stocks, who’s combined weight age make up almost 85% of the BSE's oil & gas index, pushed the index up by 7.7% in one week. News of possible issue of oil bonds by the government to help reduce losses on selling petroleum products at a price lower than the market determined one also saw stocks like HPCL and BPCL rally During the day, crossed the Rs 2 lakh crore market cap, making it the first government-run company and third Indian firm to cross this milestone. BSE's realty index performed also at par with the 6.3% rise in the sensex, as it moved 6% higher during the week. Market players believe the interest rate cycle has peaked and the central bank may now follow the US Federal Reserve's lead and cut interest rates, which would be positive for the realty sector. Other interest sensitive sectors like autos and metals would also perform well in case of a rate cut. As the rupee continued to hit new highs against the dollar, IT stocks were badly hit. TCS and Wipro dropped to one-year lows last Friday despite the broader markets moving up. But a rally on Wednesday helped the IT index move marginally higher by 0.24 % this week. This rally was despite the fact that the rupee strengthened to 39.70 to the dollar. The IT counters attracted renewed buying support on indications of increase in billing rates for new as well as old contracts to rein in margin pressure. In addition, IT shares got a boost on news that the RBI had allowed corporate, mutual funds and individuals to invest more in overseas and also increased the limit for companies to prepay their external loans to check the appreciating rupee, ultimately helping the exporting companies.
New Delhi 28-Sep-2007
The BSE sensex raced past the 17K milestone in just a week, as a few frontline stocks powered the index to new highs. While on the sect oral front, just two sectors oil & gas and real estate that beat the 6.3% rise in the sensex as it raced from 16K to 17K. Although IT stocks are still being hammered, thanks mainly to the strength of the rupee against the dollar, on Wednesday they performed marginally better on the back of short covering, market players said. BSE's IT Index is almost at the same level where it was when the sensex had crossed the 16,000 mark on September 19. "This has been a surprise rally, with select stocks moving higher. Mid-caps and small-caps have not kept pace with the large-caps. At this point, we are bullish on banking, power, and construction as well as infrastructure stocks," said Anil Advani, head of research, SBICAPS Securities. Among BSE's sect oral indices, the oil & gas sector was once again the top gainer in this 1000-point rally, on the back of substantial gains in its heaviest stock Reliance Industries, which moved up 7% since last Tuesday. Reliance Petroleum also rose by 16% during the week while ONGC gained4% to further push up the index. These three stocks, who’s combined weight age make up almost 85% of the BSE's oil & gas index, pushed the index up by 7.7% in one week. News of possible issue of oil bonds by the government to help reduce losses on selling petroleum products at a price lower than the market determined one also saw stocks like HPCL and BPCL rally During the day, crossed the Rs 2 lakh crore market cap, making it the first government-run company and third Indian firm to cross this milestone. BSE's realty index performed also at par with the 6.3% rise in the sensex, as it moved 6% higher during the week. Market players believe the interest rate cycle has peaked and the central bank may now follow the US Federal Reserve's lead and cut interest rates, which would be positive for the realty sector. Other interest sensitive sectors like autos and metals would also perform well in case of a rate cut. As the rupee continued to hit new highs against the dollar, IT stocks were badly hit. TCS and Wipro dropped to one-year lows last Friday despite the broader markets moving up. But a rally on Wednesday helped the IT index move marginally higher by 0.24 % this week. This rally was despite the fact that the rupee strengthened to 39.70 to the dollar. The IT counters attracted renewed buying support on indications of increase in billing rates for new as well as old contracts to rein in margin pressure. In addition, IT shares got a boost on news that the RBI had allowed corporate, mutual funds and individuals to invest more in overseas and also increased the limit for companies to prepay their external loans to check the appreciating rupee, ultimately helping the exporting companies.