The Hindu : Business : Rally in auto stocks

Online edition of India's National Newspaper
Tuesday, Aug 31, 2004

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Business

Rally in auto stocks

MUMBAI, AUG. 30. Led by auto sector, key counters surged ahead to a strong finish lifting the Sensex by 69 points on the Bombay Stock Exchange here today on fairly heavy buying support from operators coupled with fresh purchases by foreign institutional investors.

After a weak start at 5130.54, the BSE benchmark 30-share index later turned strong on the back of sustained buying support and spurted to the intra-day high of 5192.80 before ending the day at 5186.45 against last Friday's close of 5117.01, a net rise of 69.44 points or 1.36 per cent. Auto stocks including Bajaj Auto, Tata Motors, Hero Honda and Maruti Udyog were the prominent gainers as the truckers' strike was called off last weekend.

While, buoyancy in banking shares was attributed to the Union Finance Minister, P Chidambaram's statement that the Government would take the ordinance route, if required, to speed up bank reforms in an effort to prepare the banking system to face challenges of WTO commitments and Basel II norms.

Operators resorted to short-covering as auto sector prompted a price rally during morning trading, brokers said adding "a positive FII inflow of over Rs. 500 crores on August 27 bolstered sentiment".

The FIIs, who generally were engaged in churning of portfolios during early part of last week, were believed to be heavy buyers in select blue chip counters, particularly mid-cap stocks.

Sentiment was also aided by stabilising oil prices and marginal fall in inflation rate for the week ended August 27.

PTI

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