Sensex close to 4,000 with focus on steel stocks

Thanks to the gains by steel shares, the 30-share BSE Sensitive Index gained 56.63 points at 3,977.73 towards the close of the session. The NSE S & P CNX Nifty Index was up 34.45 points at 1,282.30.

Steel Authority of India zoomed by 29.84 per cent to Rs 51.35. It had reached a new 52-week high of Rs 51.60 intra-day on the back of a firm trend in domestic and international steel prices. From Rs 8.80 touched on April 1, 2003, the stock has risen nearly 500 per cent. Funds have been mopping up the stock over the last couple of months as it has replaced Nestle in the S&P CNX Nifty Index. Close to 5 crore Sail shares were traded on the BSE. The market capitalisation of SAIL shot up by Rs 4,915 crore in a single session to Rs 21,250 crore. It has overtaken Wipro and become the seventh largest in the overall market cap ranking.

Essar Steel (Rs 32.75) was frozen at the 20% upper limit of the circuit breaker on volumes of over 81.80 lakh shares. Other steel majors Jindal Vijaynagar Steel (Rs 22.83) and Ispat Industries (Rs 18.89) were frozen at the 10% upper limit amid massive volumes. Nahar Int’l (Rs 13.56), Ensa Steel (Rs 14.76), Isibars (Rs 11.42), Southern Iron & Steel (Rs 12.58), Lloyd Steel Inds (Rs 9.21), Surya Roshni (Rs 25.90) and Gontemann Peipers (Rs 11.86) were frozen at the 20% upper limit of the circuit breaker.

It was giving out the impression that the long-term prospects for steel companies have brightened and many hitherto loss-making companies are expected to post a turnaround. According to players, the overriding factor enabling growth is the strong demand for steel (which is also expected to be coupled with a hike in prices) from both the domestic as well as the global market.