The Hindu Business Line : Banking stocks bear brunt of market slide

The bears acted with more vigour during the day and gave no chance for the market to bounce back. The Sensex closed at 7,606.2, shedding 148 points or 1.9 per cent. This is the biggest decline in the index since July 7th. It had gained 25 per cent from May 2 to August 5.

The banking stocks bore the brunt of the day's attack as the BSE Bankex declined by 3.3 per cent. The S&P CNX Nifty was no exception and closed at 2,324.4 points - down 1.6 per cent, while Bank Nifty declined by 3.7 per cent.

The market breath was negative with losers outpacing the gainers by a ratio of 1.7:1. Surge in crude oil prices to more than $62 per barrel, weakness in the US market and caution ahead of the US Federal Reserve's interest rate meeting may have added to the gloomy sentiments in the market.

The basket of BSE 30 (Sensex) saw 28 of its heavyweights fall back on negative territory. NTPC and ONGC were the only stocks that escaped the bear's onslaught. Tata Motors, ICICI Bank and Gujarat Ambuja Cements led the pack of losers among the heavyweight stocks.

In the capital goods sector, Praj Industries weathered challenges and gained 5 per cent. The frontline stocks of Alstom, ABB, Siemens and BHEL succumbed to selling pressures.

Among the pharma stocks, heavyweights Dr Reddy's Lab and Ranbaxy led the loser's pack, followed by mid-caps such as Elder Pharma and Matrix Labs.

Torrent Pharmaceuticals was one of the few gainers in the sector. The stock rose 3.7 per cent to close at Rs 562 after it announced its plan to build a plant in Gujarat for making insulin for a Denmark-based company.

Lupin, which allied with Japanese company Kyowa Pharmaceutical to sell generic drugs, rose marginally by 0.7 per cent to close at Rs 719.

The markets viewed IT stocks with caution. The US Federal Reserve interest rates to be announced on Tuesday may have an impact on software companies deriving revenues from the US.

While the frontline stocks of Infosys, Satyam and Wipro ended in the red, i-flex Solutions, CMC and Moser Baer managed to make marginal gains.

In the media and technology sector, NDTV, VSNL and TV Today moved in line with the market sentiment that prevailed during the day. Zee Telefilms, Macmillan and Television Eighteen, however, managed to close in the green.

It was a mixed bag for the oil and gas stocks. While mid-cap stocks such as Petronet LNG, Chennai Petroleum and Jindal Drilling managed to overcome selling pressures, BPCL, HPCL and IOC witnessed profit-taking. New reports that IOC has received in-principle approval from the Petroleum Ministry to unlock value of investments in other oil PSUs failed to bring optimism in the sector.

The buoyant mood in the infrastructure sector with mounting order books did not prevent construction stocks such as Hindustan Construction, Gammon India and Nagarjuna Construction from being dragged down into the negative territory.

Mid-cap player Simplex Concrete Pile, however, defied all negative reactions and added Rs 32.6 to close at Rs 914.9.

Sugar stocks ruled strong. Bajaj Hindustan rose 4 per cent to close at Rs 216.5. The company received the RBI's approval to increase its overseas investment limit to 49 per cent from 24 per cent.

Dhamapur Sugars and Balrampur Chini Mills, however, slipped into the red.

Escorts was the biggest loser in the auto sector. The stock shed more than 7 per cent after its first quarter losses widened due to decline in sales.

Ashok Leyland and Bharat Forge were the gainers. Hindustan Motors managed a smart gain of 6 per cent.

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