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S. Muralidhar

DOUBTS about whether the expected economic recovery would be delayed by another quarter, the continuance of poor corporate performance and lingering uneasiness regarding the forthcoming Budget, affecting trading sentiment in the bourses on Monday.

The markets, which sought higher levels at the time of opening, lost ground later in the day and closed the first trading session for the week lower by about 0.4 to 0.8 per cent. The National Stock Exchange's (NSE) Nifty Index, touched a high of 1,088 points, but closed at 1071.35. The benchmark BSE Sensitive Index also slid by 0.44 per cent to close at 3,317.64 points, after seeing a high of 3,363.17 points.

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The Information Technology (IT) sector was the most affected, with most counters recording a loss. Market sentiment in IT stocks was affected after news spread that the dismal performance of the sector was likely to continue for another quarter. The BSE Teck Index (index of technology companies) fell by 14.45 points or 1.56 per cent during Monday's trade.

In addition, the sharply lower profit levels reported and expected to be reported by some industry majors such as SSI, NIIT and Subex Systems have lead to a selling spree in the segment.

The grim earnings prospects were also the reason for one of the lowest trading volumes recorded by the bourses during the last few months. Trading volumes hovered around the 60 million shares level in both the NSE and the BSE.

SSI and Subex Systems, which reported a fall in net profit of 93 per cent and 48 per cent respectively, met with strong selling pressure. Other major IT losers during Monday's trade were Wipro, Satyam Computers, Infosys and Tata Infotech.

The market also saw thin trades in most of the telecom and entertainment stocks. Uninspiring earnings prospects for main line telecommunications and telecom software companies such as MTNL, VSNL and HFCL and the poor results posted by GTL Ltd have again lead to a spate of profit booking in these counters.

In the entertainment segment, Saregama Industries reported lower Q3 performance numbers and was also seen lower by four per cent during the day's trade in the bourses. However, the Padmalaya Telefilms stock rose sharply by over 7.5 per cent after the company reported a 73-per cent increase in its net profit for the October to December 2001 quarter.

Automobile stocks were in the limelight during the early hours of Monday's session, with many of them recording modest gains. The positive sentiment in auto stocks was due to the expectations of an improvement in performance in the last quarter of calendar year 2001. However, towards the end of trade on Monday, the sentiment weakened and profit booking lead to a fall in values of many of the major automobile stocks.

Consequently, Ashok Leyland, Tata Engg and Hero Honda fell by about five per cent, four per cent and 4.5 per cent respectively.

Some of the other stocks that witnessed heavy trading on Monday were Apollo Tyres, which went up by over 4.5 per cent after posting good Q3 results, Bank of India, Indo Gulf Corporation and Sundram Fasteners.

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