The Hindu Business Line : PSUs lead across-the-board fall

IT was an across-the-board fall at the stock market with a few stocks looking up. Public sector stocks lined up for the initial public offering such as ONGC, GAIL, IBP and IPCL took a beating. With the IPOs priced at a discount to the market price, investors are selling stocks in the market to subscribe to the IPO.

Though fund managers don't feel redemption pressure, the market continues to slide. Reliance Industries, stakeholders in IPCL, had declined to subscribe to the additional five per cent stake offered at Rs 195. The five per cent offered to Reliance would now be offered to the public.

The PSU stocks to buck the trend were Dredging Corporation and Container Corporation. Dredging too is coming out with an IPO through book-building route.

Click here for table

The markets opened on a negative note but remained subdued through out the morning session. However, selling pressure mounted in the second half of the trading session pushed down the markets drastically. The BSE Sensex slumped 152.68 points to close at 5698.04 points. The Nifty lost 44.45 points to close at 1808.2 points.

The advance to decline ratio indicated a bearish trend. For every share that gained, two shares lost. However, a few stocks such as Gravity India, Aban Loyd, Upper Ganges and United Breweries touched the upper circuit filter on company specific news.

Gravity India spurted 10 per cent after the company said that it might consider a bonus issue in its forthcoming board meeting. Aban Loyd Chiles rose five per cent after the company announced that it would be enhancing its rig capacity by purchasing a 300-feet jack-up rigs.

A few stocks such as BSES, Jubiliant Organosys, Pantaloon Retail and IVRCL Infrastructure touched new highs.

Stocks such as L.G. Balakrishna Brothers and ICICI Bank touched new lows during the day. BSES has decided to issue shares through the preferential route to the Reliance, a stakeholder in the company, to pursue its long-term growth plans. The preferential equity offer is priced at Rs 640 per share. The current market price is Rs 700 per share.

Despite the broad-based dip in the banking stocks, select stocks such as HDFC Bank, ING Vysya and Canara Bank were stable. J&K Bank ruled steady after it declared an interim dividend of Rs 5 per share.

Quit a few auto component companies also inched up. A few auto component companies that attracted buying interest were Sundaram Clayton, Motherson Sumi, Jay Bharat Maruti, Subros, Auto Axles and Premier Instruments.

Tractor companies such as Swaraj Mazda and Escorts remained steady. M&M declined 3.3 per cent after a steady upmove over the past couple of weeks. These stocks have been inching up steadily over the past couple of weeks on expectations of higher offtake of tractors.

Telecom stocks remained stable in an otherwise volatile day. VSNL and Tata Teleservices (Maharashtra) were the gainers while Tata Telecom, Bharati Tele and MTNL declined.

Zicom Electronics edged up 4.5 per cent after the company announced that it has received a Rs 70-crore contract for printing and supplying of National Social Security Number Cards to be spread over a two year period. Zee Telefilms continued to slide after the company had decided to write off its investments in its overseas subsidiaries last week.

The stock of Upper Ganges Sugar has been on uptrend over the past couple of weeks. The stock closed 10 per cent higher at Rs 50.25.

Titan Industries too appeared in the gainers list. FIIs had been active in the stock for sometime. Despite the sharp upside in the past few months and the equity infusion plan not being finalised, the stock moved up after a sharp downfall from its 52 week high.