The Hindu Business Line : FMCG, capital goods, consumer durables gain

SELLING pressure brought the Sensex down by 62.78 points (or 0.94 per cent) to close at 6651.08 points, after a spectacular post Union Budget surge on Monday.

The markets, which cheered the Budget with a gain of 144.14 points, took a breather as technology, oil banking and metal stocks shed value during the day.

Even though the broad policy thrust of the Union Budget is quite positive, with continuation of tax reform measures, the fine print has revealed some apprehensions over the fringe benefit tax of 30 per cent which is a tax payable on all perquisites provided by the employer to employees.

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The Sensex opened at 6725.92 points, which was also the high for the day and yo-yoed between the high and low of 6628.22 points touched earlier in the day.

The market breadth was also negative, evident from the number of losers, which outstripped the gainers by an order of nearly 2:1.

Out of 2,439 stocks traded, 862 stocks appreciated in value while 1,523 stocks logged declines. Among the BSE sectoral indices, FMCG, capital goods and consumer durables were the prominent gainers. The losers were IT, banking, metals, PSU and banking indices.

The S&P CNX Nifty also dipped by 0.90 per cent to close for the day at 2084.40 points. The Nifty Junior also closed on a weaker note, losing 0.14 per cent during the day. But in marked contrast to the Nifty and Nifty Junior, the CNX Midcap 200 ended in the positive territory gaining 0.03 per cent during the day's trading.

Among the Nifty, the prominent gainers were Larsen and Toubro, ITC, Oriental Bank, Sun Pharma and ONGC. The losers were populated with stocks that had a direct impact of the budget such as BPCL, Satyam, HPCL, Hindalco and Tata Power. The bearishness in technology stocks such as Satyam, Wipro and Infosys appears to have been on account the fringe benefit tax.

Sugar stocks had a mixed day of trading, with most of them shedding value. Among prominent sugar stocks, Balrampur Chini gained a modest 0.32 per cent to close for the day at Rs 673.05. Nahar Sugar was the other gainer during the day.

Among the stocks that lost value were Bajaj Hindustan, Rajashree Sugars and Rana Sugars. Bajaj Hindustan lost 4.32 per cent to close at Rs. 163.85. The Union Budget has a bittersweet package, with the hike in specific excise duty on molasses and cut in customs duty on molasses and industrial alcohol likely to cap the realisations.

The banking stocks that were out performers on Monday's trading witnessed a correction during the day. Kotak Mahindra Bank was one of the few gainers, with the stock gaining 7.84 per cent to settle at Rs. 353.95. UTI Bank shed Rs. 14.95 (or 6.2 per cent) to close for the day at Rs. 226.10. The trading volumes were also lower at 2.25 lakh shares from 3.23 lakh shares on Monday's trading. Federal Bank was another significant loser during the day.

The stock price of integrated and standalone refining/marketing majors such as Indian Oil, Hindustan Petroleum, Bharat Petroleum and Kochi Refineries fell during the day's trading.

The duty changes proposed in the latest Budget have spooked investors in these stocks. Indian Oil was the biggest loser, with the stock shedding 4.76 per cent to close for the day at Rs. 468.05. The trading volumes were marginally lower than Monday's trade.

Metals stocks such as Hindalco and Nalco lost sheen following the reduction in the customs duty on aluminium and copper from 15 per cent to 10 per cent. This import tariff reduction has resulted in Nalco dropping the aluminium prices by Rs 1,000 per tonne and Hindalco following suit. While Nalco shed 2.8 per cent during the day to close at Rs. 171.75, Hindalco shed 3.14 per cent to settle at Rs 1,350.70.

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