Long after the mid-October collapse in the prices of most pivotals, severalstocks continued to languish, well after the core and popular stocksrecovered. But over the last couple of days, there has been a markedrecovery in a number of these laggards. At the same time, a number ofpivotals have hit speed-breakers, and a fair amount of market attention hasshifted towards second rung pivotals and other stocks, as indicated by thefact that gainers outstrip losers by a factor of two to one, yet majorpivotals have reported minor to no gains.Among a number of these stocks that have begun to move are stocks which wereliterally at the bottom of their yearly price bands. These are PhillipsIndia, Nestle, BASF, Cadbury, Cummins, Bausch and Lomb, Carrier Aircon, EsabIndia, Punjab Tractors, Kesoram, Colgate, Century Textiles, Thomas Cook,Voltas and Amara Raja Batteries. Even among the software stocks, a laggardsuch as HCL Infosys has begun to rally. It is quite likely that with a lotof profits being made in software and telecom stocks, some of that money isnow being shifted to underperforming stocks. Most of these stocks eitherhave a reason to trigger buying interest or are simply available at rockbottom prices.
Significantly, there has also been a sector-wise interest in the market. Fora long time, almost all banking stocks have remained dormant. Now, all of asudden, interest has picked up simultaneously in all the second rung bankstocks, such as Dhanalaxmi Bank, Bank of Madura, Federal Bank, Vysya Bankand Nedungadi Bank.
With the exception of Oriental Bank of Commerce, none of the frontline bankstocks such as State Bank of India, Corporation Bank and Bank of Baroda havereally participated though they have occasionally shown flashes of a rally,which could not materialise into a sustainable move. Simultaneously,following in the footsteps of the banking sector comes the gains for some ofthe power sector stocks. During trading on Thursday, Gujarat IndustriesPower Corporation (GIPCL) hit the upper circuit of the price filter. Thecompany is close to announcing the commercial start of its new lignite basedpower plant. In addition to GIPCL, among the power sector stocks, BSES, TataPower and diesel genset manufacturer, Wartsila Diesel have also reported asharp move.
Amara Raja Batteries
The Amara Raja stock was a surprise gainer over the last couple of days. Thecompany announced that it finally received a much awaited Rs 40 crore orderfrom the Department of Telecom (DoT), for industrial batteries which willhave to be completed by February 2000. The company had reported terribleresults in the first two quarters of 1999-2000 following delays in receivingthese orders.
The stock took an equally bad hammering falling from Rs 270 to Rs 170 in amatter of days where it has languished since. The receipt of these DoTorders will put the company back on track to record a growth over the lastyear and will ensure its return to profits in the next two quarters, hencethe re-rating.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.