Indian Markets Monday Wrap-Up: No Monday Blues This Time

Markets managed to hold on to most of the gains made in the morning session until the final hour of trade. While buying activity was witnessed in heavyweights from the realty and metal sectors, selling was witnessed in select stocks from the IT space. As regards global markets, the Asian indices closed positive, while the European indices too are trading in the green currently.

The BSE Sensex closed 140 points higher, while the NSE Nifty closed higher by 60 points. The BSE Midcap and Smallcap indices closed higher by 3.8% and 3.6% respectively. The rupee was trading at 48.10 to the dollar.

Taking cues from their Asian counterparts, the Indian benchmark indices opened in the positive. After a further upward movement during the morning session, the indices dipped lower towards the afternoon session on account of some selling witnessed at higher levels. However, towards the end the markets saw aggressive buying activity to close comfortably above the dotted line. The overall market breadth was positive with gainers outnumbering losers by a ratio of 3.5 to 1 on the BSE. While Siemens emerged as a gainer on the NSE today, Reliance Communication and Tata Power led the pack of losers.

Over the previous one year, HUL is the top gainer among the only two stocks that have gained from the listed NSE Nifty 50 stocks. While overall consumer spending (urban as well as rural) on FMCG products are showing robust rates of growth, the growth in rural markets at 20% plus has overtaken urban markets, which has grown at a rate of about 18% in recent times.

This growth could be attributed to the rise in rural disposable incomes, after three consecutive years of good agricultural growth. Also another factor that has helped augment demand for the company’s products is that government has pumped in a lot of investments into rural areas. Thus the demand in the consumer markets holding up despite economic turmoil has helped the HUL be one of the few stocks to post gains over the past year. HUL caters to various segments and offers a product portfolio across different price points. It also has a strong distribution network across the regions, thereby making it a strong player. FMCG stocks ended the day on a positive note.

As per a leading business daily, the overseas subsidiary of ONGC, ONGC Videsh (OVL), may opt for picking up only 51% equity stake in Imperial Energy if the Imperial’s shareholders fail to offer a minimum of 90% stake by December 30, 2008. OVL’s bid for Imperial Energy stands at 1,250 pence per share. It may be noted that the acquisition would be profitable to OVL due to future potential of Imperial Energy’s assets. The recoverable reserves of its assets are expected to go up by 20% to 25% more than the declared reserves of the oil assets held by Imperial energy at 900 m barrels. The stock of ONGC ended the day on a firm note.