The Hindu Business Line : Profit booking pulls market down

With the looming prospect of poor monsoons this year and the lack of any positive indicators that could have triggered a further increase in institutional investment, the day's trading session started losing steam right after the first hour of commencement.

The spurt in profit booking also seemed to have been triggered, in part, by the urge amongst institutional and high networth investors to close some of their positions and take advantage of the rise in prices that had been posted after the jump in indices during the last few trading sessions.

Despite the continued flow of good corporate first quarter financial results and the lingering effect of the part roll back of turnover tax announced by the Finance Minister earlier this month, the indices took a beating on Tuesday.

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Another interesting aspect of the indices sliding into the red during Tuesday's session was that despite the absence of negative news, the indices never really managed to strike back and rise substantially above the previous day's close. The indices started Tuesday's session on a high and their overall direction during the first hour of trading seemed to be headed upwards.

However, profit booking quickly set in at most of the counters of index heavyweights and this dragged the benchmark BSE Sensitive Index (Sensex) and the NSE's fifty share Nifty index into the red. While profit booking was witnessed in most of the industry segments, stocks in the steel, refinery and pharma segments closed Tuesday with some gains.

The BSE Sensex as a result closed the day at 5,075.9 points, down by about 42 points compared to the previous close. The Sensex had touched an intraday high of 5,155.6 points, after opening the day's session at 5,130.9 points. Despite the fall in the index on Tuesday, it still continued to be about 2.4 per cent higher than its week ago level and about 6.7 per cent higher than its month ago level. There were two stocks that had lost ground for every stock that gained from out of the Sensex thirty on Tuesday.

Despite posting an increase of over 30 per cent in its bottomline for the first quarter of this fiscal, Reliance Industries did not seem to find favour amongst investors on Tuesday. Almost as expected, the counter lost about 2.7 per cent to close the day at Rs 465. The other big losers from among the Sensex stocks were State Bank of India down 5.8 per cent, Tata Power 4.95 per cent, Bajaj Auto 3.8 per cent, BHEL 3.2 per cent, MTNL 3.8 per cent and Gujarat Ambuja Cements down about two per cent.

The major gainers were Amongst the sectoral indices in the BSE, one of the biggest losers on Tuesday, in percentage terms, was the BSEPSU index of public sector undertaking stocks. Amongst the big losers that are constituents of this index were ONGC, GAIL, Steel Authority, Nalco, Mangalore Refineries, Neyveli Lignite, Container Corporation, Chennai Petroleum and Rashtriya Chemicals. The proposed move to merge the troubled Global Trust Bank with Oriental Bank seemed to have affected investor sentiments towards the banking sector. As a result a number of stocks in the sector, particularly PSU banks, were hit. The losers included SBI, Punjab National Bank, Canara Bank, Bank of Baroda, Oriental Bank, Corporation Bank, Andhra Bank, Vijaya Bank, Bank of India, Union Bank, Indian Overseas Bank and IDBI.

Some of the major gainers from amongst pharma sector stocks were Biocon, Cadila, Nicholas Piramal, Torrent Pharma, Cipla, Ranbaxy Laboratories and Abbott India.