The Hindu Business Line : Budget blues at the bourses

UNCERTAINTY about the implications and direction of the impending Union Budget seemed to be weighing heavily on the minds of investors amid lacklustre trading on Tuesday. Most investors, including institutional clients, preferred to adopt the `wait-and-watch' approach during the day's trade.

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The hesitancy amongst investors and the prevailing sentiment in the market was evident in the movement of the major indices during Tuesday's session. At the BSE, the 30-share Sensitive Index (Sensex) was marginally down by about three points at 4,735.86. During the day, it had fluctuated within a 50-point band. After opening lower, the index had touched an intra-day high of 4,767.35 points and an intra-day low of 4,717.78 points, before settling lower at 4,735 points.

There were a near equal number of losers and gainers from among the 30 stocks in the index, with the traded value of stocks that lost ground being higher than that of those that gained.

Amongst the sector stocks that were most affected by the lack of positive sentiment in the market were oil, automobile, private sector banking and, to some extent, pharmaceuticals. Public sector banking stocks had a mixed day in the markets, with some big losers and a few gainers on Tuesday's trade.

The big loser from amongst the Sensex stocks was ONGC, which lost as much as 3.3 per cent or over Rs 21 to close at Rs 622. The company's poor performance during the last quarter of financial year 2004 has dragged down its performance for the full year. It announced its results for the just-ended fiscal on Tuesday. The lower performance numbers for the last quarter has resulted in an over 38 per cent fall in full year net revenues and a fall of over18 per cent in the net profit for the full year 2003-04.

ONGC's unimpressive performance, affected by the complex swirl of subsidies and their impact, rubbed off on other oil sector stocks. Amongst the other oil and refinery stocks that sought lower levels were Indian Oil Corporation, down 1.1 per cent, HPCL, down 2.4 per cent, BPCL, down 1.2 per cent, Mangalore Refineries and Petrochemicals, down 3 per cent, Kochi Refineries, down 1.3 per cent, and Chennai Petroleum, down 1.9 per cent.

In fact, the losers in the oil sector counters and the public sector banking counters were the reason for the BSE PSU index losing a higher 1.35 per cent on Tuesday. The biggest losers from amongst the public sector banking stocks were Punjab National Bank, down over 5 per cent, Canara Bank, down 2.3 per cent, Bank of Baroda, down over 4.3 per cent, Corporation Bank, down 1.5 per cent, IDBI, down over 2 per cent, Indian Overseas Bank and UCO Bank. The gainers in the banking sector were Vijaya Bank, up 4.2 per cent, State Bank of India, up nearly 2 per cent, Andhra Bank, Union Bank and Bank of India.

Telecom sector stocks were also in the limelight on Tuesday, probably due to the proposed move by the Government to allow a higher foreign direct investment limit for this sector. As a result, stocks such as MTNL, VSNL and Bharti TeleVentures were seen seeking higher levels. MTNL was the biggest gainer in the sector and closed the day with a near 6 per cent jump at Rs 130.35.

The BSE Teck Index was the only major sectoral index that actually posted a gain on Tuesday. This was possible simply due to the rise, though marginal, in the prices of Infosys Technologies, Satyam Computer, Bharti TeleVentures and MTNL. Together, these four stocks contribute to nearly 68 per cent of this index.

Entertainment and media stocks were, however, in the red on Tuesday, with major stocks such as Zee Telefilms, ETC Networks, Television Eighteen and Balaji Telefilms posting loses.

The major auto sector stocks that were seen lower included Maruti Udyog, Tata Motors, Hero Honda and Bajaj Auto.