The Hindu Business Line : Sensex slumps as bears dominate

Even as the news of Tata Consultancy Services (TCS) hitting the markets with its initial public offering (IPO) had barely died down, the bear brigade swung into action at the bourses. The Sensex opened the day lower and did attempt to breach its closing level on Thursday in the initial hours of trade; the movement was downhill thereafter. The Sensex closed at 4,832.71 points, 111.93 points lower than its previous day's close. All but two stocks in the Sensex ended the day in negative territory.

The Nifty closed at 1,508.45 points, a fall of 36.30 points over its previous close. The decline in the average value traded per day gives an indication of the bearish sentiment that prevails in the market. In May, the average value per trading day was in excess of Rs 4,700 crore; cut to June and that figure stands at a shade above Rs 3,800 crore. At this juncture, there do not appear to be any catalysts that can impart positive momentum to the markets; trading trends suggest that the market is looking forward to the Budget to provide it direction.

Stocks within the Sensex were awash with a rich coat of red. The fall was led by Reliance, as the stock shed Rs 15.9 to close at Rs 431.7 on the back of a trading volume of about 22 lakh shares. The fall in Reliance's price contributed close to 22 points to the fall of the index. The announcement of the TCS IPO also appeared to have impacted the fortunes of the technology stocks within the Sensex. Both Infosys Technologies and Satyam Computer ended the day with a decline of 3 per cent from their previous close. Unlike a few other companies belonging to the Tata Group outside the Sensex that saw a sharp spurt in their prices, on the expectation that they would benefit by offloading their holdings in TCS, the same was not the case with the Tata Group companies that are part of the Sensex. Stocks of Tata Motors, Tata Steel and Tata Power ended the day lower. The only two Sensex stocks that did not come under the bear influence were Hero Honda and Baja Auto, both of which bucked the negative trend and ended higher.

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Outside of a few companies of the Tata Group, a few stocks did manage to end the day higher. IBP, whose merger with IOC has been cleared, moved up smartly by Rs 25.15 to end at Rs 487.55. About 50,000 shares changed hands on the counter. Divi's Labs, Britannia Industries and CMC were other prominent stocks in which the upward movement in price was back by volumes of consequence.

A few other stocks in which there was significant price action backed by a manifold jump in trading volumes included stocks such as Ansal Properties, which rose close to 20 per cent on the back of a more-than-four-fold rise in volumes, Sterlite Optical that gained six per cent driven by an almost-nine-fold jump in volume; and Financial Technologies, which rose by about 10 per cent on a doubling of trading volumes.

Among stocks that ended the day lower, a sharp fall was to be seen in stocks such as Veejay Lakshmi, Geojit Securities and IVRCL Infrastructures. The last named fell by close to eight per cent to end at Rs 182.35. Trading volumes on the counter at about 1.6-lakh shares were far higher compared to the volumes of 0.38-lakh shares seen on Thursday. A few other stocks that ended lower were Blue Dart Express, GE Shipping, NIIT and a clutch of banking stocks.