The Hindu Business Line : Selling pressure in frontline stocks

ON Monday, the market opened on a weak note, reflecting the trend in major global markets, it declined for the second day. Aided by selling pressure among the frontline stocks, the bears were in total control of the market.

Banking stocks were affected the most; next in line were the constituents of the bellwether indices. Steel and pharma stocks also took a beating. Mid cap and small cap stocks outperformed the bellwether indices declining marginally by less than one per cent.

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The BSE Sensex opened on a weak note, the index headed straight into the negative territory. Within an hour of trade the Sensex touched the day's low of 6118.42 points, thereafter, it went on a bumpy ride recovering a part of its losses. The index closed at 6156.78 lower by 91.56 points from the previous close.

The S&P CNX Nifty also opened weak, took a dive into the red hitting the intra day low almost immediately at 1914.8, subsequently the index recovered a part of the losses only to shed them later in the last hour of trade.

The Nifty closed at 1927.8, lower by 1.46 per cent from Friday's close.

Infosys, ICICI Bank, Reliance and Tata Steel pulled the Sensex to lower levels. The advance declines ratio was in favour of the declines at 4:5, the ratio was more prominent among the frontline stocks at 3:7 among the Sensex constituents. The strength among the losers was also greater than that among the gainers.

Steel stocks were in the limelight, however, on the negative side. Selling pressure on the part of investors aided by expectations of a decline in demand for steel appears to have taken its toll on steel stocks. Essar Steel was the greatest loser in the bearish phase as the stock lost close to 10 per cent. Other losers were Ispat Industries, Mukand, Uttam Galva, Jindal Stainless, Tata Metaliks and Tata Sponge Iron, all of which shot down by more than three per cent. Other metal stocks also declined on the lines of steel sector.

A mixed trend prevailed in the oil and gas sector, a majority of refining and oil marketing companies closed with gains. ONGC shed close to Rs 6, this is on the back of the crude having shot below the $50 mark for a barrel.

The bank specific index on the BSE shot down by more than two per cent, to close lower by nearly 86 points. Intense activity was recorded on the counter of banking stocks; the declines outnumbered the gains by a huge margin.

The losers included Indian Overseas Bank, Vijaya Bank, Kotak Bank, Oriental Bank of Commerce and Union Bank. These stocks lower by more than two per cent.

Auto and auto-ancilliary stocks were among the prominent gainers. The gainers included Asahi India, Motherson Sumi Systems, Tata Motors, Maruti Udyog and Apollo Tyres.

Prompted by buying interest the stocks rose sharply by more than two per cent.

High trading activity took place in the stock of Jaiprakash Hydro-Power, the stock opened for trading on Monday after its shares were offered in an IPO at a price of Rs 32.

Over 4.6 crore shares were traded on the NSE, prompted by concerns of growth prospects, the stock closed at Rs 31.15 on the NSE lower by close to a rupee from its issue price.

Bharat Earth Movers shot up by more than three per cent to close at Rs 512, the company on Friday had announced of nearly a seven-fold jump in earnings for the fourth quarter.

Significant gainers among the Nifty constituents were Dabur, BPCL, Tata Motors, Tata Tea, Mahindra & Mahindra, L & T and MTNL.

Prominent among the Nifty losers were Dr Reddy's, National Aluminium Company, Hero Honda, Reliance Energy and GAIL.

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