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Suresh Krishnamurthy

THE expected boost to sentiment from the victory of BJP in Gujarat did not materialise or was at least not reflected in Monday's trading as stock prices declined. The decline on Monday snapped a four-day winning streak for stocks. Among BSE-500 stocks, declines outnumbered advances by more than a two to one ratio. The advance-decline statistics were similar on the NSE too.

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Trading volumes, however, did remain firm. On the NSE, trading volumes stayed above the Rs 3,000-crore mark and were higher than Friday's volumes. However, they were significantly lower than previous Monday's volumes of Rs 4,000 crore. On the BSE too, turnover was higher than that recorded on Friday.

Spurred by stocks of prominent firms, the BSE sector indices of healthcare and capital goods ended the day with gains. In the case of the healthcare sector, however, only 13 stocks advanced while 31 recorded losses. Gains were more widespread in the capital goods sector with 23 advancing and an equal number registering losses.

Majors in the healthcare sector such as Ranbaxy, Dr. Reddy's Labs, Sun Pharma and Novartis along with smaller firms such as Glenmark, Unichem and Cadila advanced. Stocks to buck the trend included Cipla, Glaxo, Pfizer and Nicholas Piramal. News that Ranbaxy is poised to receive royalties from Bayer following the USFDA approval of ciprofloxacin formulation may have contributed to the strong volumes in the counter.

Capital goods stocks to rise included PSU stocks such as Dredging Corporation of India, Bharat Earth Movers, Bharat Heavy Electricals and Bharat Electronics. MNC stocks such as Esab India, Wartsila NSD, Siemens, Widia and Alstom and stocks of Indian-owned companies such as Thermax, Elgi Equipments and Gammon India advanced. The BSE Capital Goods Index has appreciated by 38 per cent year-on-year.

Other prominent gainers include Pritish Nandy Communications (PNC), TNPL, Federal Bank, HDFC and HDFC Bank. The rise in the stock price of PNC needs to be viewed in the backdrop of the scheduled release of its major multi-starrer movie Kaante this weekend.

Reports that IDBI is intent on selling its stake are behind the firm trends in the stock of TNPL. News that Federal Bank is scouting for acquisition has also been reported. The last two reports are yet to be clarified by the concerned companies. The strong trading interest in the stocks of HDFC and HDFC Bank continued on Monday. The stock of HDFC, which went ex-bonus last week, was one of the day's major gainers.

Major losers during the day were included stocks such as Tata Engg, Punjab Tractors, GMDC, and Nalco; stocks of a number of public sector banks such as Punjab National Bank, Bank of Baroda and Bank of India and a host of software stocks also declined. The BSE-IT Index was the worst performer for the day.

The stock of Tata Engg did not receive any support from the announcement on Monday regarding the launch of another car - the Indigo Sedan.

The stock of Punjab Tractors, GMDC and Nalco which have been rising on the back of expected disinvestment of the Government's stake shed some of their gains. Similar trend was evident in the counters of PSU banks and technology stocks, which have run up sharply in the recent months.

The stock of Bharat Petroleum, in which a strategic sale has been ruled out, also joined the list of losers while the stock of HPCL, which has been pencilled for strategic sale, recorded gains.

The stock of Polaris Software was one of the day's losers. The company informed the exchange after the day's trading that the company's CMD & CEO, Mr Arun Jain, had been detained by the Indonesian Police following a commercial dispute with one of its banking customers.

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