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Nath Balakrishnan

MUCH like what was witnessed on Monday's trading, markets continued to trade with volatility on Tuesday.

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That, however, was the only similarity between trading on the two days; the volatility turned out to be the market's undoing on Tuesday, in contrast to Monday that saw the markets close in positive territory.

The BSE Sensex ended lower by 49.1 points at 4891.13 points. Mirroring the fall in the Sensex, the Nifty, too, ended lower by 15.5 points at 1564.4 points.

The intra-day movement of the Sensex is reflective of the volatility in trading; the market opened strong (up by 16 points compared to its close on Monday) and touched an intra-day high that was 40 points higher than the previous day's close.

Weakness set in during post-noon trading; the index started losing steam rapidly and went below the 4880-point level, before recovering ground marginally towards the close of trading.

Weakness in index stocks was visible across-the-board, with only stocks such as Hindustan Lever, Tata Power and Bajaj Auto providing a modicum of support to the falling Sensex. Reliance and ICICI Bank led the fall, collectively contributing 19 points to the loss in the Sensex. Grasim was another stock that came in for a sharp correction, as it shed Rs 37.60 to close at Rs 867.95. The stock has almost tripled in this calendar year.

Dr Reddy's was another stock that came under selling pressure, as it slipped by Rs 34.75 to close at Rs 1238.35. In a related development, drug giant Pfizer sued the US Food and Drug Administration for having accorded approval to Dr. Reddy's version of its (Pfizer's) blockbuster anti-hypertensive, Norvasc. Dr. Reddy's is waiting for a court ruling in its favour, before it launches the drug in the US.

Moving outside of the indices, action was witnessed in specific counters. Apollo Tyres saw its stock fall by Rs 11.05, as it settled at Rs 247.10. The company had announced the sale of a strategic stake to European tyremaker Michelin at Rs 235 per share.

In the run-up to the announcement, the Apollo Tyres stock was on a roll, as it put on close to 40 per cent within the space of a fortnight, reaching a high of Rs 278 on November 15 (the stock closed on October 31 at Rs 200.35). The fall in the stock price is probably a reflection of the disappointment of market players at the pricing of the deal.

RayBan Sun Optics was another stock that was at the receiving end as it shed Rs 2.60 to close at 60.65. The Supreme Court has stayed the open offer to be made by Italian eyewear maker, Luxottica for a 20 per cent stake in the company. Earlier, Luxottica had appealed for a decision made by the Securities Appellate Tribunal that had ordered it to make the open offer as well as pay interest at the rate of 15 per cent per annum over and above the acquisition price to compensate shareholders for the delay.

Tata Teleservices was another stock that was abuzz, that too on the back of huge volumes. The stock saw 78 lakh shares traded on the BSE (2.08 crore shares on the NSE), as it surged by Rs 1.39 to settle at Rs 21.06. The company has been awarded the licence to operate both fixed-line and mobile-telephony services in Mumbai as well as in Maharashtra and Goa.

A few other stocks that posted notable gains included TVS Motor, Divi's Labs, Lupin, ABB, Shasun Chemicals and Digital GlobalSoft.

Stocks that shed value, after having appreciated notably during Monday's trade, were Bata India and Alok Industries. Bata was down by Rs 2.10 at Rs 57.10; Alok shed Rs 0.85 to settle at Rs 51.60.

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