The Hindu Business Line : Metal sector takes a beating

THE markets shot down concern of poor monsoon this year, after opening almost flat on Thursday. Selling pressure set in after reports of an expected lower than average rainfall this month. Metal stocks went for a spin for the second consecutive day; the BSE Metal index lost 2.26 per cent. A reduction in steel prices by SAIL has led to other companies following suit.

Expect for the opening gains it had registered the BSE Sensex moved in the red for most part of the day. The Sensex after touching a high 6756.62 points in the initial minutes of trade, moved into the negative territory. After touching a low of 6647.36, it recovered marginally to close with a net decline of 74.34 points.

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After opening flat, the S&P CNX Nifty moved into the positive territory. Reports on the monsoon triggered a sharp slide. Selling pressure in the later part of the day pushed the index to further low levels. Towards close it touched a low of 2062.55 points, it subsequently closed with a loss of 1.1 per cent.

Pharma stocks continued to be among the highly active stocks. Sterling Biotech, Sun Pharmaceuticals, Wockhardt and FDC pulled down the BSE Health Care index, which lost marginally. Selling pressure took its toll on Ranbaxy, which lost about 2.71 per cent to close at Rs 1084.2. Denials by the company a patent dispute settlement with Pfizer appeared to have triggered a negative sentiment in the market. Lupin, Unichem Laboratories, Strides Arcolab, Nicholas Piramal, Wyeth and Matrix Laboratories clocked gains of more than 2.5 per cent.

A negative sentiment prevailed throughout the day in the metal sector. Following a cut down in prices by SAIL, Jindal Vijaynagar Steel announced a similar reduction in prices for its steel products. The stock lost about 1.81 per cent to end at Rs 303.95.

Other steel companies that figured in the losers list were Mukand, Bhushan Steel Strips, Southern Iron, Monnet Ispat, Llyod Steel and Tata Metaliks all of which lost more than four per cent. Aluminium stocks such as Hindalco, Madras Aluminium and National Aluminium also lost value. Sterlite lost Rs 15.7 to close at Rs 595; its parent company Verdanta Resources had announced an expectation that metal prices may fall further.

During intra-day trade, IDBI touched a high of Rs 105.9, the stock has gained about Rs 25 since May 2. Accompanied by a two-fold jump in volumes, the stock closed with a gain of 8.02 per cent at Rs 104.4.

Speculation that there is a possibility of restarting the Dhabol Power Project appears to have created the renewed interest in the stock. About 58 lakh shares changed hands on the BSE.

Significant gainers among the Nifty constituents were L&T, Colgate, Zee Telefilms, HCL Technologies, HDFC Bank and Bajaj Auto.

Prominent among the losers on the Nifty list were Reliance Energy, Reliance, Maruti, ITC and ICICI Bank.

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