The Hindu Business Line : Banking, oil, steel stocks lead market decline

THE markets ended in negative territory for second day in a row. They moved in line with the Asian markets, which also closed in the red. Rising crude prices and global weakness in steel stocks kept the sentiment subdued.

The Sensex reached a low of 6380.7 points or 1.1 per cent down, earlier in the day but managed to recover towards the end of trading session, to close at 6445.1 points down 0.1 per cent. This was reflected in the advance stocks, which outnumbered the declines by 1.3 times. The mid-cap stocks however put up a smart rally and closed in positive territory.

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The Nifty moved in line with Sensex and closed at 1985.9 points, down by 0.4 per cent. CNX Mid-cap 200 outperformed the Nifty with a surge of 0.1 per cent.

Strong buying interest was seen in the stocks of Zee Telefilms, Hindustan Petroleum, Cipla, Hero Honda and ITC. Rane Madras and India Cements were the top losers for the day. Banking, oil, steel and frontline IT stocks ended the day in negative territory.

Among the mid-cap stocks, Godrej Consumer Products rose by Rs 33.90 after the company informed the stock exchange of its intention to buy back its shares for a maximum price of Rs 400. Shares of Balkrishna Industries also surged after the company announced that it would consider issuing bonus shares.

Oil PSUs dipped as the Government asked the oil refineries to work out an equitable subsidy burden sharing formula with oil and upstream companies. The worst hit was Chennai Petroleum, which suffered a loss of 2.9 per cent. ONGC, Kochi Refineries and Mangalore Refineries also witnessed profit booking.

The banking sector met with severe selling pressure with Bank of Baroda, Andhra Bank, Oriental Bank and UTI Bank bearing the major brunt. Kotak Mahindra Bank, State Bank of Mysore and Jammu & Kashmir Bank managed to stay positive.

The band of losers in the IT stocks was Wipro, Infosys, HCL Technologies and Satyam. Satyam's fall was fuelled by its announcement to price its ADS at $21.5, which was below the market price.

Select auto stocks such as Tata Motors, Ashok Leyland and Hindustan Motors ended on a positive note, ahead of expected better results.

Steel stocks lost sheen in line with global steel weakness. SAIL, Ispat and Uttam Galva shed value by more than 2 per cent followed by Jindal stainless Steel and Sesa Goa.

Bajaj Auto gained Rs 5 after it reported an increase of 5 per cent in its fourth quarter profit compared to the figures for the corresponding period during last year. It also recommended a dividend of 250 per cent. Thermax fell by 0.6 per cent. The company earlier announced a marginal increase in its net profit for the year ended March 31, 2005. Asian Paints ended with a fall of 0.2 per cent although its fourth quarter profits went up by 34 per cent.

Jammu & Kashmir Bank lost 7.4 per cent initially on the backdrop of disappointing quarterly results. However with a dividend recommendation of 80 per cent it managed to stage a modest recovery.

BEML surged by 5.7 per cent. The company expects to win an order of Rs 1,000 crore from Sri Lanka.

Shasun Chemicals & Drugs rose by 1 per cent after its agreement to supply an ingredient to the US based Codxis Inc.

Other notable gainers for the day were Hindalco, BHEL and HDFC and the losers include Larsen & Toubro,Tata Power and Dr. Reddy's.

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Banking, oil, steel stocks lead market decline