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Sensex gains for the fourth day; defensives lead
November 5, 2012 / 11:58 AM / 5 years ago

Sensex gains for the fourth day; defensives lead

MUMBAI (Reuters) - The BSE Sensex edged up enough to mark a fourth consecutive gaining session on Monday as defensive stocks such as ITC and drug makers rose amidst global risk aversion ahead of U.S. elections and a key parliamentary vote in Greece.

People walk outside the Mumbai Stock Exchange building February 10, 2011. REUTERS/Vivek Prakash/Files

Global shares fell, while the dollar strengthened to two-month highs, on Monday as investors were unwilling to hold too much risk, as the U.S. poll on Tuesday will be followed by a Greek vote on austerity measures on Wednesday.

The risk aversion sent the rupee to a 1-1/2 month low against the dollar, and analysts said global cues would be critical for domestic markets in the days ahead.

Quarterly earnings results, including from blue chips Bharti Airtel (BRTI.NS), Tata Motors (TAMO.NS), and State Bank of India, due this week will also be key.

“Domestic markets will be range-bound in coming weeks, will take cues from U.S presidential elections,” said Daljeet Singh Kohli, head of research at India Nivesh Securities.

The Sensex rose 0.04 percent, or 7.42 points, to end at 18,762.87 points, bringing its gains to 1.8 percent over the past four sessions.

The Nifty rose 0.11 percent, or 6.50 points, to 5,704.20, closing above the psychologically important 5,700 level for the first time since October 25, and has gained 1.9 percent over the previous four sessions.

Defensive stocks gained, with some consumer good companies favoured since they are seen as offering steadier returns and potential for growth.

Cigarette maker ITC (ITC.NS) rose 1.9 percent, while Colgate Palmolive India (COLG.NS) rose 2.5 percent.

Drug makers also advanced, especially following good quarterly results announced recently.

Dr. Reddy’s Laboratories (REDY.NS) rose 1.3 percent, advancing for a sixth consecutive session. India’s no. 2 drugmaker posted on Tuesday a better-than-expected 32 percent rise in quarterly net profit.

Cipla (CIPL.NS) rose 0.9 percent ahead of its quarterly earnings later in the day.

ACC (ACC.NS) rose 2 percent after October cement shipments rose by 3.5 percent to 2.04 million tonnes, a sturdier performance than expected.

Ambuja Cements (ABUJ.NS) gained 1.3 percent.

However, Bajaj Auto (BAJA.NS) dropped 2.1 percent on profit-taking after hitting all-time high on Friday, when the company had announced record domestic motorcycle sales for October.

Shares in Crompton Greaves Ltd CROM.NS dropped 8.4 percent after the power equipment makers said on Friday net profit dropped 64 percent in the July-September quarter.

Citigroup downgraded Crompton Greaves to ‘neutral’ from ‘buy’ saying earnings were lower than expected due to losses and lower margins in its consumer business.

Public sector banks with disappointing July-September quarterly earnings fell.

Vijaya Bank (VJBK.NS) shares fell 2.9 percent after reporting a 40 percent fall in September quarter net profit, while Allahabad Bank (ALBK.NS) shares fell 2.3 percent after reporting a 52 percent fall in July-September net profit.

Jubilant Foodworks (JUBI.NS) fell 2.2 percent after Morgan Stanley downgraded the stock to ”equal-weight“ from overweight”, citing a recent out-performance in the shares and an absence of near-term catalysts.

Editing by; Additional reporting by Manoj Dharra

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