The Hindu Business Line : Dr Reddy's on `downgrade' fever

Dealers said sustained selling was seen in the counter following its results as several top broking firms have downgraded the stock to `sell'. The main reason for the downgrade is in anticipation of lower profits in the next couple of years compared to earlier estimates by the broking firms.

A leading foreign broking firm has cut the EPS forecast for 2006 and 2007 by 18 per cent and 28 per cent respectively. This firm has cut the price target and expects the stock to fall by another 20 per in the near future.

On Tuesday, the stock was down 2.22 per cent at Rs 664.75 on the BSE with volumes of 96,391 shares; on the NSE, it closed at Rs 663.55, down 1.99 per cent, with volumes of 3.69 lakh shares.

Nifty futures in deep discount

After six days upturn, stock prices came under some selling with key stock indices ending lower on Tuesday. Dealers said the sudden dip in stock indices in the last one-hour of trading was mainly due to Nifty futures coming under heavy selling.

The talk is that some big investors have again started selling Nifty futures and this could bring further downfall in the stock indices. The Nifty May futures, which were trading at a discount of 6-7 points through out the last week, closed with a discount of 27 points and putting further pressure on day-traders to offload their positions.

The talk is that if this discount continues for another day or two, sharp fall in stock prices is possible.

Rayban Sun Optics up on optimism

THE counter of Rayban Sun Optics, a company into contact lens business, has been on upward move in the last one week along with rise in trading volumes. The stock in the last one week gained more than 15 per cent while volumes were up by almost five times.

On Tuesday, the stock gained 5.45 per cent at Rs 66.80 on the BSE with volumes of 16.50 lakh shares.

Dealers said a section of the market is accumulating the stock on expectation of some positive announcements.

There are no talks of an open offer from the parent of the company at the moment. The talk is that the company may come out with good financial results in the next few quarters.

Virendra Verma

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