The Hindu Business Line : Selling pressure leads to downslide

AFTER witnessing a sharp rise fuelled by the impressive results declared by Infosys on Tuesday, the markets had a rather less thrilling day on Thursday. The Sensex declined by about 61 points to close at 5843.97, down from 5904.52 points. The S&P CNX Nifty fell by nearly 17 points from its previous close of 1878.45 and closed at 1861.95 points.

Pharma and telecom stocks were out of favour, while auto and cement stocks were on an up trend.

The Sensex opened on a positive note at 5923.84. It traded in a narrow range in the positive territory in the early hours of the morning and touched a high at 5927.04 points. However, the early resistance it encountered quickly gave way to selling pressure that drove the benchmark index down into the negative territory. It traded in the negative territory for the rest of the day and intense selling pressure in the last hour of trading resulted in a sharpdecline.

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Out of the 30 shares constituting the Sensex, only 11 advanced while 19 declined.

The major gainers among the Sensex constituents were Gujarat Ambuja, ACC, MTNL, Cipla and Bajaj Auto. Stocks that were out of favour included Zee Telefilms, Hindalco, Dr Reddys, Bharti Tele and Infosys.

Infosys, the IT bellwether that had caused a lot of excitement on Tuesday, declined by 2.83 per cent. Other tech stocks such as Satyam, Wipro and Hughes Software, which too had registered smart gains on Tuesday, also declined.

However, Polaris Software and Hexaware Technologies were among the stocks that bucked the trend. Hexaware Technologies put on Rs 14.1 to close at Rs 407.65. The company had announced its first quarter results on Tuesday and had registered a 52.8 per cent increase in profit.

Hindustan Lever, the index heavyweight, declined marginally. The stock has been out of favour in recent times in the face of price wars and modest earning numbers. The company made news when it announced on Tuesday that it was restructuring its management structure.

Cement stocks were in the limelight. The cement sector has posted a 5.46-per cent rise in output over the previous fiscal. The sector is expected to show improved performance in the coming years as the Government steps up its investment in infrastructure. Gujarat Ambuja, ACC, India Cements, Dalmia Cements, Madras Cements and Mysore Cements were on the gainers list.

Auto stocks — Bajaj Auto, Ashok Leyland, Maruti Udyog and TVS Motors — were among the stocks that appreciated. Tractor stocks gained on the back of a likely increase in prices. M&M, Punjab Tractors and Escorts were prominent gainers.

Telecom stocks witnessed weakness in the bourses on Thursday. Bharti Tele-Ventures and VSNL declined while MTNL emerged as a gainer among the telecom stocks.

Banking stocks have been witnessing heavy activity in the markets recently. This can be viewed in the backdrop of the Supreme Court upholding the validity of the Securitisation Act. The impact of this ruling would mean a better recovery of non-performing assets by banks.

Stocks that were in the limelight include UCO Bank, Vijaya Bank, Union Bank of India, SBI, Canara Bank, Bank of India and Andhra Bank. Bank of Maharashtra, which recently got listed on the exchange, posted a marginal gain.

Zee Telefilms declined by Rs 13 to close at Rs 131.4. This is despite the company posting an increase in profits for quarter ending March 31,2004.

Indo Rama Textiles gained marginally to close at Rs 24.45. It has declared a dividend of 15 per cent on its shares.

Some of the stocks that touched new highs include Balrampur Chini, Federal Bank, Pantaloon Retail, Bank of Maharashtra and Canara Bank.