The Hindu Business Line : Heavyweights pull down markets

VOLATILITY continued to plague the stock markets as they declined again on Wednesday. Although there was slight revival on Tuesday, the markets traded predominantly in the negative territory on Wednesday and ended marginally lower than Tuesday's closing.

Click here for table

The Sensex closed at 5395.28, down by nearly six points from its previous close of 5400.99 points while the Nifty declined by four points to close at 1692.10 points. Index heavyweights Infosys and Hindustan Lever, whose weights together account for about 14 per cent in the Sensex, led the fall. Buying activity was, however, seen in select auto, energy and bank stocks.

The Sensex opened on a positive note at 5412.13 points. However, the bearish sentiment in the market took its effect and the benchmark index slid into the negative territory where it remained for the greater part of the trading day. In the last hour of trading, the market was able to recover some of the earlier losses, on the back of buying activity. The index inched up and closed at almost the previous day's closing. Out of 1930 stocks traded on the exchange, 823 advanced while 1004 declined and 103 remained unchanged, reflecting the negative mood in the markets. Tech stocks continued to trade weak and were among the prominent losers. In addition to outsourcing backlash, the appreciating rupee also seems to be a source of worry for IT companies. Infosys declined by Rs 112 to close at Rs 5044.70. Wipro also declined on the back of news that the US-based Capital One Financial Services discontinuing the use of Wipro Spectramind's telemarketing services for its credit card operations. The stock declined by Rs 10.8 to close at Rs 1384.50. Bucking the trend was Polaris Software, which appreciated by Rs 9.15 to close at Rs 200.75.

Hindustan Lever fell by Rs 2.45 to close at Rs 148.25. The stock's decline could be on rumours that Henkel Spic cut prices of its detergent Henko Stain Champion by 17 per cent. Henkel posted marginal gains.

Select buying was witnessed in the auto stocks. Hero Honda gained Rs 11.5 to close at Rs 461.85. Tata Motors gained Rs 10.5 to close at Rs 439.35. This could be on the back of news of Rover Group's plans to expand sales the CityRover cars to Spain and Italy. Rover buys the Indica car of Tata Motors. The rise could have also been due to the revised rating of the company to positive from negative by Moody's.

Maruti Udyog was also among the major gainers. It put on Rs 5.55 to close at Rs 451.6.

There was a mixed trading interest in oil and energy stocks. Stocks such as HPCL and IBP appreciated on reports that petrol and diesel prices are likely to go up by at least Rs 2 per litre after the Lok Sabha polls. However, IOC and BPCL declined. Reliance Energy surged by Rs 17.55 to close at Rs 738.15. It has issued and allotted zero coupon foreign currency convertible bonds aggregating $ 178,058,000 to international investors

Abbot India gained Rs 5.9 to close at Rs 429.5. The company had posted good result for the quarter ended February 29.

Cipla gained Rs 19.05 to close at Rs 1173.40 following its approval of the stock split.

ABB gained Rs 32.1 to close at Rs 739.5. The company is to seek its member's approval for its proposal to divest its control valve business.

Dena Bank increased marginally to close at Rs 26.25. The bank announced that it is planning to raise Rs 250 crore in the next three months via a mixture of subordinate bonds and a second public issue to fund its expansion programmes and increase its capital adequacy ratio. Considerable activity was also witnessed in Vijaya Bank and Indian Overseas Bank. Both closed higher by Rs 1.3.