The Hindu Business Line : IT scrips buck trend amid continuing plunge

THE bearish sentiment prevailing in the markets shows no sign of letting up with the market plunging further on Monday. Fears of rising oil prices, added to the uncertainty of the reform process, had a negative impact on market sentiment.

However, select buying activity, particularly in the software sector, managed to contain the losses. The BSE benchmark index, the Sensex, declined by 76 points to close at 4,759.62 while the Nifty closed 25 points lower to end at 1,483.60.

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The Sensex began the day at 4,760.28, sharply lower than its previous close of 4,835. However, the markets gained smartly on the back of bargain buying, though the gains were not enough to push the benchmark into the positive territory.

The day's trading was extremely volatile. The index touched a low of 4,665.21 and a high of 4,830.08, registering an intra-day swing of 164 points. For every stock that advanced, four declined. Heavy buying in software stocks such as Infosys, Satyam and Wipro helped the index recoup some of the losses suffered during the day.

Software stocks were in favour as investors looked to invest in sectors that were relatively unaffected by Government policy. The stock of i-flex Solutions witnessed significant gains, surging Rs 24 to close at Rs 526.

Another sector that saw some action was the auto sector, with leading players announcing their financial results. The stock of Punjab Tractors was among the few gainers. The stock gained Rs 9 to close at Rs 224.

The company's fourth-quarter results showed an increase in net profit to Rs 16.7 crore against Rs 8.32 crore reported in the corresponding previous quarter.

The annual profits were, however, lower than that recorded in the previous year.

The stock of Mahindra & Mahindra saw a decline of Rs 9 to close at Rs 420. This decline was despite the company posting impressive results for the fourth quarter and for the year.

Banking stocks continued to remain under pressure. The stocks have been on the receiving end of the bearish sentiment, with investors growing nervous about the impact that the new Government's policies would have on the banking sector.

ICICI Bank was a prominent loser. However, public sector banks such as Canara Bank, IOB, Dena Bank and Vijaya Bank saw heavier losses. A stock that bucked the trend was Oriental Bank.

Despite the negative mood in the markets, investors showed buying interest in certain stocks on the back of good news.

The stock of SRF gained marginally on the news that it had received a process patent from the US Patent & Trademark office for the production of difluoromethane.

Vardhman Spinning gained on the back of good results announced by the company, which has also declared a dividend of 42 per cent. The stock of Mahavir Spinning however, did not appreciate, although the company announced a dividend of 45 per cent.

EID Parry gained Rs 2.3 to close at Rs 204. The company has declared a 75 per cent dividend for the year gone by. Swaraj Engines put on a good show, gaining Rs 12 to close at Rs 267. This surge could be attributed to the company's declaration of 150 per cent dividend.

The stock of Petronet LNG remained stable, managing to sustain investor interest owing to its capacity expansion plans.

Ranbaxy declined marginally despite the news that the company had received an approval from the USFDA to manufacture and market fenofibrate.

Reliance Energy witnessed considerable activity during the day. The company is contemplating a possible buyback of shares. The stock fell by Rs 12 to close at Rs 486.