Sensex rises 148 points; M&M leads gain
Despite the RBI’s decision to not cut interest rates as widely expected, the stock market gained today, driven largely by gains in index heavyweights and the automobile major Mahindra & Mahindra. Rajeev Mullick reports.business Updated: Jun 17, 2013 23:39 IST
Despite the RBI’s decision to not cut interest rates as widely expected, the stock market gained on Monday, driven largely by gains in index heavyweights and the automobile major Mahindra & Mahindra.
The Bombay Stock Exchange benchmark Sensex gained by 148 points to close at 19,325.9 a gain of 0.8%. The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended 0.72 percent or 41.65 points up at 5,850.05 points.
The Mahindra & Mahindra stock gained higher than the broader market indices at 4.43%, to close at 989.4 points — a gain of 41.95 points. "This is mainly because of the CIE deal (an auto-part maker that M&M has acquired)," said Yaresh Kothari of Angel Broking. "Mahindra is selling its stake in subsidiaries (that are going into the alliance with CIE) at a premium to current price and thus has resulted in a positive sentiment."
"An early monsoon has raised hopes of better farm output, which is likely to generate buying power in rural areas," said Savitree Singh, of The Market.
So how does the retail investor approach the stock? "The long term investor should be invested (in M&M) as they are a leader in tractors," says Kothari, who has a ‘Buy’ rating on the stock with a Target price of Rs 1,090. "I would advise investors to remain invested in the stock," Singh also agreed.
"In coming sessions, 5875 shall be crucial deciding level in near term," said Nidhi Saraswat-senior research analyst at Bonanza Portfolio. "Above 5875, the likely target is 5,900-5950, and below 5800, the likely target is 5,750-5,700."