The Hindu Business Line : Bear hug led by IT, pharma and banking stocks

THE bearish phase in equities, which has set in over the past week, continued in Wednesday's trading with a widespread decline in prices, cutting across sectors. Led by stocks such as Infosys, Reliance, ICICI Bank and Wipro, the Nifty and the Sensex ended the day lower by about two percentage points.

Indices tracking broader markets such as the CNX 500, the CNX Mid-Cap 200 and Nifty Junior declined in a more pronounced manner with the last mentioned ending the day with a decline of 3.6 per cent. It is dominated by banking stocks as well as a host of mid-cap stocks.

Click here for table

Only 4 stocks from the large-cap Nifty and two from the Sensex managed to end the day with modest gains. HDFC (a stock that has more often than not done well when the markets are a wobbly state), Grasim, Colgate and ABB were only the Nifty stocks to end the day with gains.

In the mid-cap category, 96 per cent of stocks sported declines. Only 20 stocks in the BSE 500 managed to avoid a coat of red.

On the BSE, declining stocks outnumbered advancing stocks by a factor of nine on a day when weak FII interest and widespread profit booking took the centrestage.

That several stocks with gains of slightly less than a rupee figured among the list of top 20 gainers in absolute terms captures the negative sentiment in a graphic manner.

A fairly impressive earnings announcement by the preferred information technology play - Infosys - barely crated a ripple as stocks from this space led the market decline. Infosys, Wipro, Satyam Computer and Tata Consultancy Services were all marked lower on a day. Markets barely took note of the trebling of profits reported by Mastek. Even as there was a bloodbath in the IT sector, interested trading appears to have led to gains in California Software and Geodesic Information Systems.

It was an unhealthy atmosphere for pharmaceutical sector stocks, perhaps driven by concerns about the implications of a change in the indirect tax structure.

There was no stopping the downtrend in the Ranbaxy stock. Even as Cipla, Dr Reddy's and Wockhardt shed value, a host of mid-cap and MNC pharma stocks such as Abbott, Aventis, AstraZeneca and GlaxoSmithKlien Pharma, which have been fancied in recent months, sported sizeable losses. The only pharma stock of note to escape the broad trend was Nicholas Piramal.

The other sector that was marked by notable declines in values was banking. Apart from ICICI Bank and SBI, the likes of Punjab National Bank, Oriental Bank of Commerce and Bank of Baroda were traded sharply lower.

Several of the small-cap and mid-cap banking sector stocks as well as stocks of SBI associates, too, which have tended to often buck the trend in large-cap banking stocks, did not do so in Wednesday's trading.

As was the case with the pharma sector, only one prominent banking stock - Corporation Bank - managed to hold its own. On such a day, even to finish with marginal gains was a credit.

Tata Finance was marked down for the second day running and it ended lower by about 20 per cent as investors priced in the swap ratio for its merger with Tata Motors. It has now shed the gains that were notched up in Monday's trading ahead of the announcement of the swap ratio, which was not unexpectedly adverse for Tata Finance. A few mid-cap stocks that managed to notch modest gains in the day's trading were Balaji Telefilms, Container Corporation, Raymond, Vardhaman Spinning and Pantaloon Retail.

Other gainers were Ashapura Minechem, Kaveri Telecom, Crompton Greaves, Apollo Tyres, Phillips Carbon Black, Himatsingka Seide, U P Hotels, Bharat Rasayan, Vimta Labs, Panacea Biotec and Kesoram Industries. Notable losers were Shreyas Shipping, Tata Teleservices, Ispat Industries, Harita Seating, Zee Telefilms, Tata Power, Ruchi Soya, Shri Adhikari Brothers, Satnam Overseas and Havell's India.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Madhucon board okays pref allotment

CBDT prescribes forms for rebate on STT

Bears march ahead

London SE AIMs for small Indian cos

Every seventh stock traded hits lower circuit

Sensex still in correction mode; sheds 120 points

Pharma stocks: Excise duty talk keeps them ill

Trend reversal likely in HPCL

Reddy moots capping FII inflows — But not in favour of the move at this stage

The surge and participatory notes

`No plan to tax inflows'

What they say

Bear hug led by IT, pharma and banking stocks