Textile cos surged 10-16% on BSE

MUMBAI: Shares of textile companies surged 10-16% in intra day trading on the BSE on Friday on hopes that the government's second stimulus package would bring relief to the sector, currently struggling with a sluggish demand and falling overseas exports.
The trend however failed to sustain the gains and most stocks ended down due to a decline in the broader stock market.

Frontline industry stocks such as Raymond, Bombay Dyeing, Welspun India, Supertex Inds, Bombay Rayon, Arvind, Victoria Mills, Nahar Industrial, Sutlej Textiles, Century Enka and Ruby Mills opened with a positive gap of 10-16% in early trade, but ended the day losing 3-5%.

"Most textile counters witnessed alternate bouts of buying and selling amidst mixed sentiments in the market," said a senior analyst with Anargram Stockbroking. The sector, which has been badly hit in the last couple of months due to the ongoing global recession, saw most stocks trading near their 52-week low.

However it is widely expected that the textile companies could see a revival in the mid-term on the hopes that the government's stimulus package would help the industry to recover fast, he added.

The textile ministry has set a target to attract more than $8 billion (about Rs 40,000 crore) foreign direct investment in textile and garment sectors over the next five years. The ministry is in the process of identifying potential investors in Europe, US and China.

The government is also likely to invite leading private equity funds and foreign banks to invest in the domestic textile sector. Earlier on December 7, the government had issued a package of Rs 1,400 crore under the Technology Upgradation Fund Scheme for the textile sector.