The Hindu Business Line : Stocks tumble across the board

THE bellwether indices took a nose-dive on Friday, with the Sensex falling below the 6300-mark after more than nine weeks. The fall is also its steepest since May 17. The lower guidance from Infosys appears to have given the market the jitters. While the fall in prices was across-the-board, for tech stocks it was a massacre. Select pharmaceutical stocks felt the heat as well.

The BSE Sensex came crashing down by a whopping 219.58 points or 3.4 per cent to close at 6248.34 points. This is its second weekly fall; the index has declined by close to eight per cent from a month ago.

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The NSE Nifty also suffered similar declines, dropping 69.15 points or 3.41 per cent to end at 1956.30 points.

There was no stopping the bears on Friday.

The Sensex opened at 6339.73 points, more than 120 points lower than its previous close. It then proceeded to decline steadily, remaining in the negative territory throughout the trading session.

The stock of Bajaj Auto was the only one among the 30 stocks constituting the Sensex that managed to put up a fight, gaining a smart 2.85 per cent to close at Rs 1,080. Stocks worst hit include Infosys, Wipro, Cipla, Satyam and Reliance Energy.

While Infosys continues to report a stellar performance, its lower guidance for the forthcoming year had investors turn bearish on the stock. Falling steeply almost immediately after the markets opened, the stock reached a low of Rs 1,945 or 7.40 per cent. Value buying in the later part of the session, however, propped it up to Rs 1,956, 4.5 per cent lower than its previous close.

The negative sentiment towards Infosys also spilled over to other frontline technology stocks, such as Wipro, TCS and Satyam.

To put things in perspective, the CNX IT index declined 5.76 per cent The stock of Wipro ended six per cent lower at Rs 605.30. Middle and small rung companies also suffered losses. The stock of Aztec Software declines nearly eight per cent to close at Rs 103.25, despite announcing strong earnings numbers.

Other losers included Geometric Software and Tata Infotech. Bucking the trend was the stock of Geodesic Information Systems, which advanced 8.62 per cent to close at Rs 127.90. Interest in the share appears to have picked up after the RBI removed the limit on overseas investments in the stock.

For many of the stocks that ended in the positive, gains were only modest. Select stocks, however, managed to steal the limelight even in these markets. The stock of ABB had a shining day on the bourses on Friday. Following the announcement of its 63 per cent rise in profits during the first quarter, the stock surged by 4.3 per cent or Rs 54 to close at Rs 1,297.40.

Another prominent gainer was the stock of Television 18. The stock added 8.87 per cent or Rs 20.25 to close at Rs 248.55. The company is to raise $50 million from overseas market to fund its new channels. A general news channel is on its planning board.

The stock of the rival NDTV fell steeply by about 12 per cent to close at Rs 164.55.

The stock of Ruchi Infrastructure gained 2.01 per cent to close at Rs 470.2. The company has announced a 10 to 1 stock split as well as a bonus issue in the ratio of 3:1. The stock was, however, thinly traded.

For stocks in the pharmaceutical sector, it was a mixed bag on Friday. Stocks such as Dishman Pharmaceuticals, Nicholas Piramal, Pfizer, Torrent Pharma and Aventis Pharma were gainers. The stocks of Ranbaxy, Cipla and Dr Reddy's, however, were out of favour. The stock of Dr Reddy's declined by Rs 25.15 to close at Rs 711.8, after news that it had lost a patent challenge case against Eli Lilly.

Other prominent losers for the day included Hindustan Zinc, Essar Steel, K Sera Sear, India Cements and SAIL.

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