Shares firm up on falling crude prices
With international crude oil prices cooling off and key equity indices showing signs of strengthening at current levels, investors may use every rise to get out of small and medium-cap stocks and accumulate large-cap stocks.business Updated: Aug 05, 2008 21:06 IST
With international crude oil prices cooling off and key equity indices showing signs of strengthening at current levels, investors may use every rise to get out of small and medium-cap stocks and accumulate large-cap stocks.
“If you look at the overall results, there is significant pressure on the profitability of small and medium cap stocks,” said Manish Sonthalia, vice-president, equity strategy, Motilal Oswal Financial Services. “Our advice to investors is to accumulate large cap stocks.”
With the price of US crude hitting a three-month low of $118 per barrel intra-day, domestic shares firmed up in the second half of the trading session after European markets opened on a strong note. The US Federal Reserve is meeting on Tuesday to decide on interest rates, which will again decide the path for the markets.
The benchmark Sensex of the Bombay Stock Exchange (BSE) ended at 14,961, up 2.6 per cent, or 383 points, while the Nifty of the National Stock Exchange closed higher by 2.45 per cent at 4,502 points. While Asian equity indices formed a mixed bag, all major European indices firmed up during the day.
The BSE Bankex led the gains among sectoral indices, closing the day higher by 6.65 per cent.
“Banking, telecom and select commodity stocks look good at current levels,” said Sonthalia.
The market breadth was also positive with 1,779 stocks on the BSE registering gains against 923 declines. A total of 280 stocks hit the upper circuit on the BSE and got frozen, while 361 stocks were locked at the lower circuit.