The Hindu Business Line : Profit-taking in late hour takes Sensex down

AFTER a steady up trend in the last four trading days, the markets plunged on Thursday. Though there was selling pressure across board, especially in the blue chip and mid-caps, select power, technology and engineering stocks held firm.

The Sensex fell by 26 points and closed at 5815.87 points down from its previous close of 5842.20. The Nifty ended at 1844.95, 15 points lower than its previous close of 1860.40. The Sensex opened on a flat note at 5842.41 points, up by just 0.21 points from its previous close. It traded in a narrow range but remained in the positive territory for a greater part of the day. However, the afternoon session saw broad-based selling pressure with investors taking profits. The indices slipped into the negative territory led pre-dominantly by HLL and Tata Steel. HLL, which has a 5.51 per cent weightage in the Sensex, declined to Rs 158.05.

The major gainers were ICICI Bank, Infosys, Tata Power, ONGC and SBI while the notable losers included Zee Tele, Bajaj Auto and Hindalco to name a few. Going by the advance - decline ratio, the broad markets reflected a bearish sentiment. Of the 2,045 stocks traded, 747 advanced while 1,214 declined. The trend was particularly prevalent in the A and B1 category stocks.

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Technology stocks registered impressive gains. Leading the pack were HCL, MphasiS BFL, Infosys, NIIT, Tata Infotech and i-flex solutions. MphasiS gained by Rs 22.8 to Rs 638.75 on news of being assessed at SEI CMMI Level 5, the highest quality level of process maturity. Polaris software and HCL Tech were among the stocks that declined.

FMCG stocks decline was led by heavy weight Hindustan Lever. The stock has been on down path for the past two trading days mainly due to news of the price cuts initiated by its rival Proctor & Gamble.

With margins under pressure, the decline has persisted despite the company's announcement of a similar price cut. Bucking the trend, Marico Industries gained Rs 36.90 and closed at Rs 279.90. This could be viewed in the backdrop of the company's announcement that it is considering the issue of bonus shares and declaring a third interim dividend.

ICICI Bank put up a stellar performance after being on the losing end in the past few trading days. The stock zoomed up by 4.69 per cent to close at Rs 289.25. Other banks that gained include Global Trust Bank, SBI and Punjab National Bank while HDFC Bank was a prominent loser.

Auto stocks were also on a downward mode on Thursday. Daewoo Motors bucked the trend closing higher at Rs 10.14. This follows news that General Motors has offered to purchase its passenger car assembly assets. Among the auto ancillary stocks, Exide Industries was in the limelight, gaining Rs 4.4 to close at Rs 132 on news of its likely entry the US automobile battery market. Apollo Tyres gained by Rs 5.75 to close at Rs 245.95. It is considering a preferential allotment of shares to Michelin, France for a consideration of about Rs 135 crore.

Power stocks displayed buying interest in the earlier parts of the day. Tata Power gained Rs 6.6 to close at 376.9 and Reliance Energy gained Rs 9.45 to close at Rs 809.25.

Engineering stocks such as Bharat Earth Movers, Cummins India and Thermax appreciated. BHEL gained by Rs 1.2 to Rs 592.5 on the back drop of bagging a Rs 333 crore order from Gujarat State Electricity Corporation.

ONGC gained by Rs 8.5 to Rs 760.05. The Government has fixed the price band at Rs. 680- Rs 750 and has offered a discount of 5 per cent on the final cut off price to retail investors.

Stocks that touched new highs include ITC and Maruti Udyog, which have reached new highs for two trading days in a row.