The Hindu Business Line : Sharp sell-off in mid-cap stocks

THE bout of profit booking in mid-cap stocks continued on Tuesday. The CNC Midcap 200 Index declined by a steep five per cent. About 300 stocks, most of them from the mid-cap and small-cap genre, shed more than eight per cent.

Even stocks forming part of the Nifty Junior had a rough day with the index shedding 4.5 per cent. In contrast, large-cap stocks had a relatively sedate day with the Nifty losing about 2.25 per cent.

The sentiment was extremely bearish. In the case of BSE 500 set of stocks, 453 recorded declines. On the whole, 80 per cent of the traded stocks declined at the BSE. For the large-cap BSE Sensex, the proportion of declines was lower at 67 per cent.

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About 234 stocks from B1, B2 and the T group hit the lower circuit filter in contrast to 42 stocks that hit the upper circuit. Stocks that hit the upper circuit filter included Upper Ganges, VST Tillers, Jubilant Organosys and Nahar Industries.

There were only a handful of gainers with the stocks of shipping companies being the most prominent. Stocks of GE Shipping, Shipping Corporation and Varun Shipping gained between two per cent and five per cent. The proposal in the Budget to levy tonnage tax, which is expected to reduce their tax out go, was received favourably by the markets.

Other stocks to notch gains included Hindalco, Jubilant Organosys, Surya Pharma, Monnet Ispat and Denison Hydraulics. The stock of Hindalco rose three per cent in the backdrop of the announcement that Indian Aluminium is foraying into hydel power projects. Hindalco holds a 96 per cent stake in Indian Aluminium.

The stock of Jubilant Organosys firmed up by two per cent as the company announced a bonus offer, issue of global depository shares and acquisition of a larger stake in another company.

The stock of Surya Pharma, which announced Rs 60-crore capital expansion programme, gained 1.2 per cent. The stock of Monnet Ispat, which announced a merger with Monnet Power, remained firm and edged up by 0.5 per cent. Some power sector players such as BHEL, Siemens and BSES also gained. Other large cap stocks to record gains include Sun Pharma, Bajaj Auto, GlaxoSmithKline Pharma and Hindustan Lever.

Among major losers were stocks such as Crest Communications, Man Industries and Agro Tech Foods. The stock of Crest Communications, which announced equity expansion through allotment to promoters, slumped by 15 per cent. Man Industries, which announced Rs 140-crore expansion project, found its stock decline by eight per cent. The stock of Agro Tech Foods declined by six per cent. CDC, a major shareholder, had offloaded a substantial part of its stake in the company.

Some of the major losers included select stocks from the banking sector. Stocks such as UTI Bank, IDBI Bank, Canara Bank, Bank of India, Union Bank of India and Andhra Bank recorded sharp declines. Stocks of old private sector banks such as Karur Vysya Bank, Karnataka Bank, Federal Bank and South Indian Bank also suffered steep losses.

Stocks that bucked the trend include ICICI Bank, J&K Bank and ING Vysya Bank.

Apart from the stocks of public sector banks, those of other public sector enterprises also ended with a sharp decline in price. Stocks such as Neyveli Lignite, Rashtriya Chemicals, Steel Authority, GAIL, Bharat Earth Movers and Indian Oil Corporation slumped.

Consumer goods companies also suffered large losses. Television sector companies such as MIRC Electronics, BPL, Videocon International and picture tube maker Samtel Colour were the prominent losers.