The Hindu Business Line : Markets plummet as uncertainty prevails

THE cloud of uncertainty that prevailed over the stock markets last week continued to cast its shadow with the benchmark indices falling further on Monday. The Sensex, which declined 4.56 per cent last week, was dragged down by another 70 points to close at 5584.99, while the Nifty fell by 29 points from 1796.10 to close at 1766.70.

Select PSU stocks took a beating possibly due to mounting uncertainty regarding the elections, with the next exit poll on Wednesday. ONGC and SBI were among the stocks that were the worst hit.

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The Sensex opened on a weak note at 5645.86 down nearly 10 points from the previous close of 5655.09. It traded in the negative territory for the entire trading session. After reaching a low of 5506, it gained on the back of select buying activity. However, the bearish sentiment prevailing in the market did not allow the benchmark index to recoup the entire losses it had suffered in the earlier session, with the result that it ended the day down by 1.24 per cent.

Reflecting the bearishness was the advance-decline ratio. Among the stocks constituting the Sensex, for every stock that gained, two stocks declined. While index heavyweights such as Reliance, Infosys, ITC and HLL gained, the index was dragged down by ONGC and SBI, which lost 2.59 per cent and 3.76 per cent respectively.

Stocks of HLL and ZEE Telefilms, which fared badly on Friday, were in favour on Monday. Zee Telefilms gained Rs 5 while HLL gained Rs 1.60. Wipro was another prominent gainer, appreciating by Rs 8. This could be on the back of news reports that the company along with IBM's Indian unit had bagged a $1-billion order from Royal Dutch/ Shell group.

Metal stocks were the losers on Monday. Fears of the effect that China's decision to slow down its economy will have on exports of aluminium and steel, took its toll on the stocks. Tata Steel declined by Rs 15 to close at Rs 342.50. Hindalco also shed Rs 48 to close at Rs 1,066. Shipping stocks were also among the sectors affected by the decision, with freight rates registering a fall. GE Shipping, Mercator Lines and Essar Shipping were the prominent losers.

Buying interest was prominent in some of the pharma stocks. Cadila Healthcare, Cipla, Lupin, Aventis Pharma and Nicholas Piramal were among the stocks that gained. Cipla gained smartly by Rs 30 to close at Rs 1,398.35. This comes on the back of a strong quarterly performance.

Auto stocks witnessed heavy profit booking. Maruti Udyog fell by Rs 9.25 to close at Rs 534.85. This is despite the fact that its April sales have grown by 38.40% over April last year. TVS Motors declined by about Rs 1.95 to close at Rs 84.95. This could be viewed in the backdrop of the drop in sales of its two wheelers by 4.58 per cent.

Despite good news, the bears ensured that certain stocks closed lower. Ashok Leyland declined by Rs 9.45 to close at Rs 256.75. This despite the news that it had signed a collaboration agreement with ZF of Germany, world leader in transmissions, for local manufacture of ZF's 9S109 gearbox. The agreement also provides for making available to the company the manufacturing technology and process improvements for ZF's proposed successor to the 9S109 gearbox.

Century Textiles also fell by about Rs 2.15 to close at Rs 123.20, even as it posted a 145 percent increase in earnings. The company also declared a dividend of 20 percent.

I-Flex Solutions fell sharply by about Rs 30 to close at Rs 499.60. FirstCaribbean International Bank, largest banking operation in the Caribbean is to employ the company's FLEXCUBE to facilitate their cross border operations in offering online real time banking and related e-services.