The Hindu Business Line : Caution knocks off early gains

After opening on a positive note, the key indices fell sharply towards the end of trading. Frontline stocks Reliance Industries, Hindustan Lever and ICICI Bank led the bearish trend. Twenty-two of the BSE Sensex constituents declined, but the declines were lower in the broader-based indices.

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The Sensex opened higher by 16 points; the index made initial gains and touched an intra-day high of 6734.72. It then went on an intermittent slide, shedding nearly 40 points in the last hour of trade. It closed down 43.65 points from Friday's close.

The S&P CNX Nifty opened at 2117.95 and moved within a band of 36 points. After touching an intra-day high of 2124.8 in the initial minutes of trade, it subsequently fell to close at 2096.6.

Key stocks in the oil sector registered declines. While standalone refineries Chennai Petroleum and Kochi Refineries declined marginally, petroleum majors Indian Oil Corporation and Hindustan Petroleum shed more than 1 per cent. Bharat Petroleum and Mangalore Refineries bucked the trend.

Auto and auto-related stocks declined amid booming oil prices and an expected rise in steel prices. Ashok Leyland, Bajaj Auto, Mahindra & Mahindra, Maruti Udyog, Sundram Fasteners and Exide Industries shed value. Tata Motors declined amid media reports of an expected fall in growth rates for fiscal 2006; the share slipped 2.35 per cent to close at Rs 45.35. TVS Motors bucked the trend; the stock gained 1.61 per cent, with over 86.2 lakh shares changing hands on the BSE.

Tyre stocks put on gains amid a fall in rubber futures in China. Goodyear, MRF and Apollo Tyres added more than 1 per cent. Substantial volume was reported on the Ceat counter as over one-lakh shares were traded on the BSE; the stock gained 9.98 per cent.

A mixed trend prevailed in the banking sector; while a larger number of stocks in the sectoral index advanced, key stocks pulled down the index. Vijaya Bank, Bank of Baroda and Bank of India put on gains of more than 2 per cent. Corporation Bank, HDFC Bank, ICICI Bank, Oriental Bank of Commerce and Punjab National Bank declined. Allahabad Bank gained 11 per cent on the back of announcements that it plans to raise Rs 900 crore by offering 10-crore shares. The stock closed at Rs 110.4.

Satyam Computer advanced by 1.3 per cent amid information that the company had bagged an order for application and system maintenance from Bridgestone's European operations. Other major gainers in the IT sector were Infosys Technologies, Tata Infotec, Patni Computers, NIIT and D-Link

Prominent metal stocks Essar Steel, Sterlite, Jindal Steel, National Aluminium Company and Hindalco declined. Mid-cap stocks such as Nava Bharat Ferro Alloys, Tata Sponge Iron, Ispat Industries and Kalyani Steel gained.

Shaw Wallace & Co gained nearly 2 per cent amid reports that the UB Group of companies has increased the open offer to Rs 260. The group had entered into an agreement to acquire 54-per cent stake in Shaw Wallace with a non-compete clause. The stock of United Breweries Holdings gained 1.31 per cent while United Breweries declined by 5.82 per cent

Prominent gainers among the Nifty constituents were VSNL, Bharti Tele-Ventures, MTNL, Zee Telefilms, Glaxo Pharmaceuticals and Dr Reddy's. Significant losers were Dabur, Hindustan Lever, Grasim, Shipping Corporation of India and IPCL.

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