The Hindu Business Line : Mid-cap stocks remain attractive

THE markets continued in the "correction" mode on Monday's trading, with both the bellwether indices registering marginal losses at the close. But mid-cap stocks continued to see heightened activity, defying trends in the large cap stocks.

The BSE Sensex closed the day 15.9 points lower than Friday's close, at 5,511 points. The Nifty mirrored this trend, losing 0.29 per cent to close at 1,717.5 points. The mid-cap stocks appear to have fared much better with the CNX Midcap index and the Junior Nifty, both closing the day with marginal gains. Within the index basket, more stocks lost ground than gained. The advances to declines ratio within the Sensex basket was at 6:24, indicated that declines overwhelmed advances by a big number. Pharma and steel stocks occupied centre stage on the day's trading, driven by company-specific developments in the case of the former and production numbers for the latter.

Index moves: Hindalco, Infosys and ICICI Bank were among the major index gainers for the day. The Hindalco stock gained Rs 35.60 to close at Rs 1,296 on expectations that firm aluminium prices will bolster its earnings.

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The National Aluminium stock also followed suit, notching up gains during the day. Infosys (up Rs 25.60) and ICICI Bank (up Rs 2.95) also closed marginally higher. Bharti Tele-ventures (down 3 per cent) and Ranbaxy Labs (down 2.6 per cent) were the major losers within the Sensex basket.

Steeling up: Steel stocks attracted plenty of attention during the day's trading on both macro and company-specific developments. Apart from steel majors such as SAIL and Tata Steel, stocks such as Ispat Industries, Essar Steel and Lloyds Steel also attracted substantial trading volumes. SAIL and Essar Steel registered marginal gains during the day's trading. Statistics for the April-August period have shown that steel sales grew by 5.4 per cent over the corresponding previous period, outpacing production, which rose by 2.9 per cent. Exports were sharply lower, as companies pushed domestic sales, rather than exports.

The Ispat Industries stock saw a surge in trading volumes on the back of a marginal price gain (up by 36 paise to close at Rs 11.86). The company has announced that it is in talks with bondholders to restructure its foreign currency loans.

Pharma buzz: Stocks of both frontline and second-rung pharma companies were active during the day's trading with some registering handsome gains.

Sun Pharma led the list of gainers, notching up gains of Rs 17.80 to close at Rs 433 on unverified reports that the company is set to acquire three pharma brands from a San Diego-based company.

GlaxoSmithkline Pharmaceuticals also appreciated by Rs 17 to close at Rs 668. The company announced that the Mumbai High Court has approved the amalgamation of Burroughs Wellcome with the company. The record date for the merger has been set on October 11.

Stocks of companies such as Glenmark Pharma, Kopran, Morepen Labs and Matrix Labs also saw a surge in both trading volumes and price. Glenmark announced the licensing of a diabetes drug to US-based Forest Laboratories in a $190 million deal.

New listings cool off: Stocks which were recently listed on the bourses cooled off during the day's trading after a steady surge the previous week.

The Indiabulls stock lost Rs 1.30 to close at Rs 22.5, on the back of robust trading volumes. The Crew B.O.S stock closed at Rs 45.80, after marginal losses.

Volume surge: Stocks which witnessed significant jumps in volumes during the day were JK Paper (45 lakh shares), Kopran (18 lakh shares), Nagarjuna Fertiliser (13 lakh shares) and SPIC (10 lakh shares). Each of these stocks closed the day with small trading gains.