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Thursday, Mar 11, 2004

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Key index stocks drag Sensex down

Nath Balakrishnan

WEAKNESS in key index stocks such as Reliance Industries, ICICI Bank and Hindustan Lever dragged the Sensex for the second day in a row. After the 80-point drop on Tuesday, the market shed a further 91 points to end the day at 5759.29 points. The Nifty slipped by 21.70 points to finish at 1844.35 points.

The advances-to-declines ratio, which is skewed in favour of the latter, also captures the distinctly bearish trend at the markets. Declining issues at 1221 easily had the measure of advancing issues, which stood at 697. The prices of 103 stocks remained unchanged.

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Reliance Industries, which commands the highest weightage on the Sensex, remained weak as it shed Rs 11.10 to end at Rs 572.35. About 23-lakh shares were traded on the counter. Weakness continued to dog FMCG major Hindustan Lever, as the stock shed a further Rs 5.05 to breach the Rs 150 mark on the downside and close at Rs 149.35. Reports indicate the company may cut prices on some of its mid-range detergent brands, though the quantum of the impact on its bottomline is not known as yet.

It was a mixed day for technology stocks on the Sensex. Even as Infosys Technologies and Satyam Computer ended the day at Rs 4,888 and Rs 294 respectively, Wipro bucked the trend and moved up by Rs 26.30 to finish the day at Rs 1,455. About 2.25-lakh shares were traded on the Wipro counter.

Weakness was also pronounced in the case of a few old-economy stocks within the Sensex. Two-wheeler major Hero Honda saw a sharp drop of Rs 35.10, as it closed for the day at Rs 494.60, representing a loss of about seven per cent; stocks such as Gujarat Ambuja, Grasim and State Bank of India also ended the day in negative territory. ONGC, however, continued on its northward journey, as the stock gained Rs 3.00 to settle at Rs 840.60.

Outside of the Sensex, some action was also witnessed within stocks of the pharmaceuticals sector, especially of the MNC category. Two stocks that posted significant gains from this category were GlaxoSmithKline Pharma and Burroughs Wellcome, after an announcement was made by the former that its board would convene in a week from now to consider the latter's merger with itself.

Glaxo put on Rs 19.45 to end at Rs 637.30 on the back of trading volumes of about 40,000 shares; Burroughs Wellcome put on Rs 98.50 to end at Rs 856.95. The merger is expected to confer synergistic benefits for Glaxo. Aventis Pharma, Novartis and Pfizer were the other pharma stocks from the MNC brigade that ended the day in positive territory. Close on the heels of the NPPA announcing price cuts on certain bulk drugs and formulations, domestic pharma major Nicholas Piramal announced that its impact would be that of lower annual profit before tax by about Rs 0.5 crore.

The stock shed Rs 7.15 to end at Rs 783.05.

Berger Paints continued to consolidate on the gains that it had made after it announced that its shareholders would get bonus shares in the ratio of 1:2. The company announced that its board would meet to consider the proposal of a stock split, aimed at improving liquidity. On trading volumes of about 30,000 shares, the stock surged by Rs 11.05 to end at Rs 203.25.

Other stocks that witnessed significant upmoves included Motor Industries, Unichem Laboratories, HCL Infosystems, ABB, Alembic, Vimta Labs, Jubilant Organosys and Kochi Refineries.

Divi's Laboratories, Tata Motors, Matrix Laboratories, Procter and Gamble, Siemens, Oriental Bank of Commerce and Ranbaxy Laboratories were some of the prominent stocks that ended the day lower.

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Key index stocks drag Sensex down

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