Financial Daily from THE HINDU group of publications
Thursday, Mar 24, 2005
Financial Daily from THE HINDU group of publications Thursday, Mar 24, 2005 |
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Markets
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Commentary Columns - Sensor Stocks shed value as bears rule market Alagappan Arunachalam
ON Wednesday, the bears were all around the market. Selling pressure across indices and categories appears to have taken its toll on the market. The market appears to have factored in on a strengthening dollar accompanied by a hike in the interest rate by the US Federal Reserve by a quarter percentage point. The bearish undertone was evident in the advances-decline ratio, for every stock that advanced three stocks shed value. The bearish sentiment was less prominent in the frontline stocks compared to the low-value stocks. Nineteen stocks on the BSE Sensex declined while 11 gained value. The bearish trend appears to have penetrated the mid- and small-cap categories. Infosys, HDFC Bank and ONGC dragged the Sensex downhill. The BSE Sensex opened nearly flat at 6533.65 points; it moved in a volatile manner. For brief intervals, the Sensex moved into the positive territory. It shed nearly 60 points in the last hour of trade. The Sensex tumbled 81 points from Tuesday's close. The S& P CNX Nifty opened at 2061.2, moved within a band of 48 points; the index touched an intra-day low of 2019.85 points. The Nifty shed 1.71 per cent to close at 2026.4. Banking stocks continued their downward trend. Andhra Bank, Indian Overseas Bank, J&K Bank, Union Bank, Kotak Bank and Bank of Baroda registered sharp declines by more than 5 per cent. Corporation Bank and UTI Bank bucked the trend registering moderate gains. Software stocks took a plunge into the red amid a strengthening dollar. The US accounts for more than half of the revenues of software companies in India. D-Link, Polaris, Rolta, Flex Industries, Infotech Enterprises and Aztec Software declined by more than 4 per cent. A bearish trend prevailed in the metal stocks; ferrous and non-ferrous stocks declined. Jindal Steel, Essar Steel, Bhushan Steel and Strips, Jindal Stainless Steel, Sterlite Industries and Hindustan Zinc declined more than 3 per cent. Jindal Vijayangar and Steel resumed trading on Wednesday and closed at Rs 388.8. Oil stocks closed lower due to selling pressure from market participants. Top losers in the oil sector were Mangalore Refineries, IBP, Indian Oil, Bongaigaon Refinery and Kochi Refineries. This has to be viewed in the light of the Petroleum Minister's statement deferring a hike in fuel prices and reports that Indian refiners processed lower crude in February 2005 compared to that in the previous year. A mixed trend prevailed among the pharmaceutical stocks. With the passing of the Patent Bill in the lower house of Parliament, heavy trading was seen in the counters of pharmaceutical companies. Dr Reddy's Laboratories, Morpen Laboratories, Aarti Drugs, Nicholas Piramal and Shasun Chemicals were the gainers. Aurobindo Pharma, Aventis Pharma, Cipla, Divi's Lab and Glenmark Pharma were some of the stocks that fell. The stock of Matrix Labs gained more than 8 per cent, amid information that it is to acquire a 60-per cent stake in MCHEM Pharma Group of China. Stocks of the Reliance group advanced on speculation that the Ambani brothers were nearing a settlement. Reliance Industries, Reliance Energy, Reliance Capital and IPCL were up. The open offer to the shareholders of ACC opened on Wednesday. The stock closed at a discount of about Rs 14 to its open offer price. Significant gainers among the Nifty constituents were Hero Honda, Hindustan Lever, Bharti Tele-Ventures, Dabur and Ranbaxy. Prominent losers were GAIL India, State Bank of India, Zee Telefilms, Tata Power, HDFC and SAIL.
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