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Wednesday, Oct 15, 2003

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Markets pegged back as 11-day rally snaps

Nath Balakrishnan

THE cliché that all good things have to come to an end asserted itself at the markets with a bang. After having been on a blistering run that saw the Sensex put on close to 13 per cent over a 11-day trading, a correction was very much on the cards. On a day of volatile trading, the Sensex ended the day at 4782.03 points, lower by 67.24 points compared to its close on Monday.

Correspondingly, the 50-stock Nifty registered a drop of 25.95 points to settle at 1520.80 points.

The Sensex opened strong at 4866.12 points, up by about 17 points over Monday's close before it scaled a high of 4900.92 points. The Sensex then dropped to the 4810 level in the early hour trades, recovered, thereafter, to move closer to the 4900-mark. In the last hour-and-half of trading, the Sensex fell precipitously by over 100 points to close at 4782.03 points.

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Bearishness in trading was evident, as 20 out of the 30 stocks that constitute the Sensex, ending the day in a negative territory.

Leading index stocks such as Reliance Industries, ITC, State Bank of India, Infosys, Tata Motors and Tata Steel — which rode the crest of the bull wave that the markets witnessed over the past few trading sessions — came in for profit booking.

Reliance and ITC were collectively responsible for a fall of close to 33 points on the Sensex. The former fell by 3 per cent as it ended at Rs 466.65; the latter lost Rs 30.25, as it settled for the day at Rs 876.65. State Bank, too, was a prominent loser, as the stock shed close to Rs 19 as it finished at Rs 474.15.

It was only stocks from the pharma sector that stood out on a day when profit-booking was the dominant theme. Reports that the US Food and Drug Administration was likely to approve an alternative method that would easen the entry of generics into their market came as a shot in the arm to stocks such as Dr Reddy's, Cipla and Ranbaxy.With Indian pharma players increasingly training their guns on the burgeoning generic opportunity in the US, such a move would only provide a further fillip to their initiatives. Dr Reddy's vaulted by as much as Rs 102.85, or close to 9 per cent, as it ended the day at Rs 1,270.9; Cipla was another prominent gainer as it put on Rs 46.25 to finish at Rs 1,090.50. Ranbaxy moved up marginally to close at Rs 1,028.85.

Hero Honda, Indian Hotels and Mastek were a few companies that declared their quarterly earnings on Tuesday. The market's response to the numbers put out by Hero Honda and Indian Hotels was rather lukewarm; the former was up by Rs 2.5 to end at Rs 335.40, even as the latter remained flat at Rs 335.35.

In the case of Mastek, the stock took a pounding as it reported yet another quarter of disappointing numbers, which saw earnings plummet by about 80 per cent at Rs 3 crore. The steep fall in earnings saw the stock price too taking a beating as it shed Rs 31.35 to close the day at Rs 230.55.

Other stocks that shed some of the gains they had made recently include TVS Motor, Aurobindo Pharma, Kotak Mahindra Bank, i-flex solutions, ONGC and Bharat Forge.

Even as the markets were reeling under a bear grip, a few stocks did manage to escape its clutches and end in a positive territory. Gainers include Asahi India, Berger Paints, CESC, L G Balakrishnan Bros, Macmillan India, Matrix Laboratories, Mercator Lines, Pidilite Industries, Raymond and TVS Autolec.

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