Stock Market: Shipbuilders ride the rising defence tide; fund houses pull out indices

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By S Jha

New Delhi, August 16: Prime Minister Narendra Modi in his reply to the debate on the motion of no confidence had forcefully argued the case of the rising revenue of Hindustan Aeronautics Limited (HAL) to counter the Opposition claims against his government hurting the interests of the defence sector PSUs. Modi appears to be vindicated by the dream run of the defence sector PSUs.

On Wednesday, the shipbuilders from the PSU pack rode the high tide of the equity market to race to new peaks. After Mazhgaon Dock Shipyard had galloped to turn into a multi-bagger, it was the turn of the Cochin Shipyard and the Kolkata-based Garden Reach Shipyard to play the catch up. Both the shipbuilders rose by over 17 per cent, while Mazhgaon Dock too continued to rise, gaining another three per cent on the bourses.

The defence sector scrips remained in high demands as the likes of Data Patterns, Zen Technology, Premium Explosives, Avantel, and a few more gained sharply on Wednesday. With the indigenization theme playing out, the order books of such scrips are swelling to take them to new high on the bourses.

Meanwhile, Nifty staged a smart recovery after once more tanking in the early sessions of the day. The recovery in the boarder market was led by an all-round institutional buying. The foreign institutional investors also reversed their trend to emerge as net buyers in the cash markets along with their domestic counterparts. The frenzied fund buying helped Nifty recover over 130 points from the day’s low. The power sector was buzzing, while the IT scrips were in high demand. Infosys extended its gain from Monday to go past Rs 1400 level, while pulling along the likes of Tech Mahindra, HCL Technology, Wipro among the heavyweights. The smallcap IT scrips have already been buzzing and some of them such as R Systems, Nucleus Software, and others posted handsome gains on the bourses.

The advance decline ratio on the bourses was 1:1 even while the indices are stated to be in sideways mode with buy on dips theme playing out. Nifty managed to close in the green after several days to give a respite to the bulls who have been battered by the bears who were riding the inflation fear to pounce on them. The Cabinet decisions for new projects in the Railways, as well as the electric bus scheme, are likely to play on the Thursday session, which will also be a weekly expiry for the option contracts.