The Hindu Business Line : Reliance fall triggers market slump

IT wasn't a smooth passage into the weekend for the markets, after all. Led by a fall in Reliance Industries, Reliance Energy and HDFC, the benchmark Sensex slumped by 70.73 points to end at 6,233.54.

ONGC led the fall in the Nifty, which shed 20.95 points to settle at 1,969 points.

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On a day when trading was marked distinctly by a sense of bearishness, stocks from the hotel sector continued to rule firm. Sugar sector and pharma stocks ruled weak in line with the broad market trends.

A decline in the value of the rupee vis-à-vis the dollar also acted as a booster to technology sector stocks.

In the basket of Nifty stocks that comprise large-cap stocks, only 10 of the 50 registered gains and even those were moderate in nature. On the BSE, advancing stocks trailed declining stocks comfortably with the latter accounting for about 65 per cent of the total.

But the picture was different in the B1 group that includes a swathe of mid-cap and small-cap stocks. Advancing stocks marginally outnumbered declining stocks in this category.

Stocks from the Reliance fold had a bad outing with Reliance Energy figuring among the top losers for the day. Reliance Industries too fell sharply as the spat between the Ambanis showed no signs of abating and news flow continued to reveal newer facets to the crisis over `ownership issues'.

GlaxoSmithKline Consumer was up sharply on the announcement of a buy-back programme that covers 7.3 per cent of its equity. The stock closed about 8 per cent shy of the buyback price of Rs 370 per share. This move appears to have triggered expectations that the sister concern, GlaxoSmithKline Pharmaceuticals, which is sitting on a pile of cash, could make a similar move and led to a spurt in its price on a day when MNC pharma stocks were on a weak terrain.

Investors checked in into hotel stocks in a big way. This was the only sector that sported gains across the board, led by Taj GVK Hotels and Indian Resort. The buoyancy was also reflected in stocks of smaller players such as Jaypee Hotels and Kamat Hotels. Indian Hotels, however, ended the day gaining just a rupee.

Engineering was another sector that had a good outing though the gains were not across the board a la the hotel sector. BHEL, Bharat Electronics, Alfa Laval, Atlas Copco and Thermax sported a rich coat of black as institutional buying emerged in frontline players.

Stocks from the pharmaceutical space shed value with Ranbaxy Labs, which has been on a steady upward trend, leading the decline. Matrix Labs, which has been on a sharp upswing in recent weeks, too took a breather.

A few stocks such as Divi's Laboratories and Shasun Chemicals ended the day in positive territory. Also bucking the broad trend was Albert David, which figured among the list of top gainers for the day with a 20 per cent rise in price.

Even on a day when the index heavyweights ruled weak, several mid-cap stocks such as Ind Swift (the HSBC Asset Management group announced that it has raised its stake in the company's equity to more than 5 per cent), Indiabulls Financial Services, Rico Auto, Ramco Systems and Bharat Forge, that have been on a relentless upward trend, maintained the momentum.

Stocks of a similar genre that took a breather included Max India, United Phosphorus, Nicholas Piramal, Sundaram Clayton and Geodesic Information Systems.

Other prominent gainers were Bharat Rasayan, FDC, Maharashtra Scooters, Vishal Exports, LIC Housing Finance, Jaypee Associates, Godrej Industries, Phoenix Lamps, Bell Ceramics and Rane Madras. Notable losers were Philips Carbon Black, TRF, IDBI, DCM, Searle, Jindal Photo Films, Godrej Fertilisers, Majestic Auto, Alstom and Mukand.