The Hindu Business Line : Banking, IT stocks suffer sharp losses

THE bull-run continued on the bourses for the sixth consecutive session as the bellwether indices closed the day on Monday with modest gains. While Sensex added 34 points, Nifty was up by about six points.

Banking stocks, which rallied sharply last week, came in for sharp selling pressure. Andhra Bank, ICICI Bank, HDFC Bank, SBI, Indian Overseas Bank and Punjab National Bank shed considerable value. Mirroring the losses among the major banking stocks, the BSE BANKEX and the Bank Nifty were down by about 0.6 per cent.

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Although there was broad-based buying, markets exhibited volatility as investors stayed cautious in the initial hours of trade. However, with strong buying support among the index heavyweights such as ONGC, Gujarat Ambuja, ACC, Bajaj Auto and Bharti Televentures, markets pared the initial losses. While the Sensex closed at 7669.5,the Nifty settled at 2318.

Mid-cap stocks that were out of favour last week were back in action. Those that put up a smart show included Voltas, NDTV, India Cement, Escorts and Marico.

Profit booking among the frontline IT stocks kept them in the negative territory. Infosys, Satyam, TCS and Wipro suffered sharp losses. However, the second-rung stocks such as Polaris, Patni Computers, Geometric Software, Mastek and iGATE Global ruled firm.

There was widespread buying interest among most of the FMCG stocks on the back of good earnings announcements. HLL was sharply up after its earnings grew for the first time in six quarters. Marico, Colgate-Palmolive, Nirma, Dabur India, Tata Tea and Britannia also recorded smart gains. However, ITC, Tata Coffee and McDowell failed to lure the investors.

There was a high level of buying interest among the stocks in the capital goods space. Most prominent gainers were Praj Industries, HEG, Siemens, Alfa Laval and Dredging Corporation. However, Alstom Projects, L&T, BEML, ABB and Gammon India failed to buck the trend.

There was a mixed bag of response among the pharma stocks. Ranbaxy flared up 9.4 per cent on reports that it had received tentative approval from the USFDA to manufacture and market anti-diabetes tablet. Others that pocketed sharp gains included Merck, Torrent Pharma, Dr Reddy's, Morepen Lab, Dabur Pharma and Biocon. However, Glenmark, Divi's Lab, Aventis and Novartis ended weak.

Most of the steel stocks took a severe beating after the country's largest steel maker, SAIL announced a price cut for a third straight month following a surge in the world steel output. Tata Steel was a significant loser whose stock slipped by one per cent while SAIL was down by 0.2 per cent. Bhushan Steel, Hindalco and Essar Steel also lost sheen. However, heavy bout of buying activity across the counters of Jindal Stainless, Nalco, Sesa Goa, Madras Aluminium and Maharashtra Seamless saw the stocks rally.

It was a field day for most of the stocks in the automobile sector. Ashok Leyland, Tata Motors, Maruti Udyog, Maharashtra Scooters, TVS Motor, Hero Honda and Eicher Motors netted off handsome gains.

Stock specific action: Arvind Mills gained 3.7 per cent after its earnings for the quarter ended June 30 more than doubled. It closed at Rs 133.4.

i-flex lost Rs 24.3 or 2.8 per cent after the software maker announced an 86 per cent YoY dip in its Q1 earnings.

Reliance Capital, which said that it, would buy AMP Sanmar Life Insurance jumped 7.5 per cent to close at Rs 451.4.

Reliance Energy was up 3.7 per cent on reports that it is in talks with overseas companies to sell them a stake in a gas-fired power plant that it plans to build in northern India.

Other prominent gainers on the Nifty were Aegis Logistics, Bombay Dyeing, Bharat Forge, Macmillan, Monsanto, Thermax and Titan Industries.

Those that led the losers' pack were Shopper's Stop, Raymond, Madhucon Projects, Gokaldas Exports, Exide and Blue Dart Express.

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