The Hindu Business Line : Heavyweights drag down indices

AFTER languishing in a narrow range, the key market indices made a sharp downtrend on Wednesday. The BSE Sensex recorded a 91.86-point drop to close at 4644.9, while the S&P CNX Nifty dropped by 28.6 points to settle at 1446.1. The drop in value was on the back of increased business volume.

At the BSE, the total turnover increased to Rs 1,770 crore from Rs 1,494 crore registered on Tuesday. At the NSE, the turnover rose to Rs 4,042 crore from Rs 3,496 crore recorded the previous day. Bulk of the activity was, however, confined to the index stocks.

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At the BSE, the 30 stocks that constitute the Sensex accounted for about 68 per cent of the turnover. Within the universe of Sensex stocks, Reliance Industries, State Bank of India and Larsen & Toubro accounted for about 60 per cent of the turnover. The market activity outside of the index stocks remained lacklustre.

In an otherwise listless market, a sharp rise in trading volume and a steep fall in share price was evident in index heavyweights such as Reliance Industries, State Bank, Tata Engineering and Infosys. This triggered the sharp fall in the indices on Wednesday.

The share price of Reliance Industries dropped by Rs 20.6 to close at Rs 411.05. Trading volumes more than doubled to 49.5 lakh shares from 24.4 lakh shares recorded on Tuesday.

After being severely battered, select pharma stocks got some reprieve on Wednesday. The likes of Ranbaxy Labs, Dr Reddy's Laboratories, Lupin and IPCA Labs registered modest gains. The share price of Ranbaxy increased by close to Rs 10 before settling at Rs 888.05. Trading volumes dropped to 3.4 lakh shares from 4 lakh shares recorded the previous day.

The pharmaceutical sector also had its representatives in the losers list as well. Except for a handful of gainers, there were quite a few losers from the sector with Divi's Labs and Nicholas Piramal being the prominent ones. The share price of Divi's Labs fell by Rs 21.1 to Rs 1270.85.

Bearish sentiment was apparent across key sectors such as software, banking and PSUs. In the software sector, index majors such as Infosys, Satyam and Wipro were prominent losers.

The share price of Infosys dropped by Rs 50.9 to Rs 5325.05. Reflective of the overall weak sentiment in the sector, the S&P CNX IT index dropped by 25.65 points to close at 2036.15. Hexaware and e-Serve International were the prominent gainers from the sector.

In the banking industry, State Bank of India, Oriental Bank of Commerce and J&K Bank were the prominent losers. The share price of SBI dropped by 3.6 per cent to Rs 408.9. Close to 45 lakh shares were traded during the day.

Punjab National Bank was a prominent absentee from the losers list. The bank's share price increased by Rs 4.7 to Rs 249.55. Trading volumes, however, declined to 8.5 lakh shares from 13.4 lakh shares recorded the previous day.

Increase in price backed by a sharp rise in trading volumes was the common thread running across stocks such as Ashok Leyland Finance, Crompton Greaves and Tata Tea. The share price of Ashok Leyland increased by 2.1 per cent to Rs 123.15. From 5,427 shares on Tuesday, the transaction volumes spurted to 12,093 shares.

A sharp increase in trading volumes was evident in stocks such as Ashok Leyland, MICO and Siemens as well. The share price of these companies, however, settled on a weak note.

In the case of Ashok Leyland, trading volumes increased to 32,413 shares from 15,047 shares recorded the previous day. The share price registered a fall of 4.4 per cent to Rs 206.85.

The share price of Siemens dropped by Rs 17.6 to Rs 802.65. Close to 11,100 shares were traded during the day as opposed to 3,050 shares recorded the previous day.