The Hindu Business Line : Sensex slips under selling pressure

THE markets fell for the second consecutive trading day, with banking stocks bearing the brunt of the selling pressure. The BSE Sensex declined a further 31 points from its previous close of 4769 points and ended the day at 4738.62 points. The Nifty ended the day at 1482 points down nine points from its previous close of 1491.20 points. The BSE Bankex registered the heaviest decline among the indices on the BSE. The Bankex declined by 1.71 per cent. A similar trend was observed on the NSE. The CNX Nifty Junior saw the sharpest decline of 1.61 per cent, possibly due to its overweight in banking stocks.

The Sensex opened on a flat note, just one point over the previous close. It remained range bound in the positive territory during the first hour of the trading session. However it quickly shed points, with only 12 out of the 30 stocks constituting the benchmark index registering an advance in stock prices.

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Leading the fall was SBI, which fell nearly 5 per cent during the day. The other stocks that dragged down the benchmark index include Ranbaxy, Zee telefilms, Maruti and Bharti Tele-Ventures. The gainers of the day were Wipro, Hindalco, Hero Honda, Infosys and BHEL.

Banking sector: Banking stocks appeared to be the whipping boy of the bears on Monday. Among the 16 stocks constituting the Bankex, the stocks of Andhra Bank, Bank of Baroda and SBI were the worst hit. The beating in banking stocks is being attributed to the loan -restructuring package for farmers announced by the Finance Ministry on Friday. UTI Bank was the only stock that managed to post a substantial gain at 5 per cent.

Pharma sector: The stocks belonging to the pharma sector continue to be on the receiving end, following the recent downgrade of pharma stocks by the foreign brokerage firm, CLSA. Prominent losers include Ranbaxy, Dr Reddys and Cipla. Ranbaxy declined Rs 31 to close at Rs 878.

Technology sector: Tech stocks have managed to remain strong, despite fears that prevailed all through last week that funds would sell their holdings in other tech stocks in order to subscribe to the TCS IPO. Among the IT sector stocks, the biggest gainer was Wipro, which appreciated by 3.67 per cent to close at 1568.55 points. The stocks of Infosys and I-flex solutions were also among the gainers. The stock of I-flex gained Rs 8.5 to close at Rs 566. The company has just entered into an agreement with Reuters and Reveleus to devise a risk management product.

Company announcements: The stock of HDFC gained Rs 6.90, following the announcement of its results for the year 2004. Britannia Industries rose by nearly Rs 2. The company is considering a proposal to buy back shares.

Heritage Foods declined by Rs 3 even as the company declared a dividend of Rs 2.75 per equity share.

The stock of Bajaj Auto gained marginally on news that the company is to purchase a 27 per cent stake in Maharashtra Scooters (MSL) from Western Maharashtra Development Corporation (WMDC).

The stock of BHEL, one of the major gainers of the day, appreciated by Rs 7 to close at Rs 495.55. This can be viewed in the backdrop of the company having bagged a Rs 80-crore order from Petroleum Development Oman.

The stock of Bharti Televentures declined by Rs 4 to close at Rs 131 even as the company acquired an additional 1 per cent equity stake in Hexacom India.

The stock of Jindal Steel declined by Rs 3 even as it plans to raise $60 million through domestic bonds and $20 million from overseas banks to fund expansion plans of its ferro alloy plant in Orissa.