The Hindu Business Line : HDFC sees interest in lacklustre market

THE markets sputtered and closed flat on profit-taking, after a swinging start to the day's trading on Tuesday. The Sensex remained well below the tantalising 6,000-point mark.

The BSE Sensex, which opened at 5,937 points, rose to 5,957 during the morning session with index constituents notching up significant gains, but lost steam in the afternoon session and finally closed at 5,929 levels. This was practically unchanged from the previous day's close.

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The Nifty too followed the same pattern, starting strong but weakening as the afternoon session progressed. The Nifty closed at 1,858.7 points, just 4 points down from Monday's close.

The BSE Tech index was the strongest index for the day, closing 0.8 per cent higher than the previous close. The PSU index was the biggest loser, shedding 1.01 per cent, as oil stocks cooled off from the gains of the past few days.

Within the Sensex basket, 18 stocks registered declines to 12 stocks which registered gains. But few stocks within the index registered any significant price movement.

Index constituents

HDFC, which gained 3.9 per cent to close at Rs 705.8, was the star performer, putting on Rs 27. The stock was reacting to the news that the housing finance company was contemplating a hike in lending rates, post-Diwali. The company has indicated a 50-basis point hike in lending rates, which could bolster its spreads. Satyam Computers, up 2.5 per cent at Rs 399 and HDFC Bank were the other notable gainers.The stock of Ranbaxy Labs lost Rs 41.2 to close at Rs 1,080.4 during the day. A downgrading of the company's investment prospects by a foreign institution was thought to be behind the fall in the stock. The downgrade was based on the discontinuation of clinical trials for one of the company's drugs by Schwarz Pharma - a German company to which the drug was licensed. BHEL was another stock that slid in value during the day's trading, losing 2.1 per cent to close at Rs 616.

Mid-cap action

There was, however, significant activity within a select group of mid-cap stocks. Among the major gainers for the day were Phoenix Mills (up Rs 47.5 to close at Rs 3,200), Lakshmi Machine Works (up Rs 35.7 to close at Rs 7,455), Skanska Cementation (up Rs 25.4 to close at Rs 280.3), Abbot Labs (up Rs 19.5 to close at Rs 639.6).

The Rallis India stock resumed its upward journey during the day, gaining Rs 14.2 to settle at Rs 184.5. The stock has been a consistent gainer over the past week, driven by the turnaround in financial performance and open market purchases in the stock by Reliance Capital. Textile stocks, Pantaloon Retail, which surged by Rs 16.1 to Rs 474 and Raymond, which rose by Rs 12.5 to Rs 272.5, were the other major gainers on the bourses on Tuesday's trading.

Among the significant losers for the day were Grasim, which lost Rs 20.1 to close at Rs 1,116 and Ranbaxy Labs. The former reported an 11 per cent growth in cement sales in the latest month. Bayer CropScience (down by Rs 17.5 to Rs 248.5) and Atlas Copco (down by Rs 24.2 at Rs 646.6) also featured prominently on the losers list. Companies in the State Bank group- the State Banks of Mysore, Travancore and Bikaner also lost ground during the day. But trading volumes in these stocks were relatively thin.

Higher activity

Stocks which saw substantial trading volumes changed hands during the day were Bayer CropScience, Arvind Remedies, Mascon Global, Satnam Overseas and Gujarat NRE Coke.

Gujarat NRE Coke closed practically unchanged after the day's trading, but saw a surge in trading volumes. The company's board approved a 1:1 bonus offer and a 10 per cent dividend during the day.