The Hindu Business Line : Concern over crude dampens sentiment

A NEGATIVE sentiment continued to prevail in the market, consequent to the new highs registered on several stocks and FIIs expressing that the Indian markets do not continue to be as attractive as they were prior to the sharp bull run witnessed in the recent weeks. Concerns on rising crude prices also aided the sentiment.

A more than 2:1 advances-declines ratio in favour of the losers reflected the mood of the markets. Many of the sector oriented indices registered declines. The mood was pronounced in the mid-cap and small cap space with indices registering declines of 1.25 per cent and 1.36 per cent respectively.

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The BSE Sensex, consequent to Tuesday's sharp fall opened on a rather flat note. High volatility could be gauged in the market with the bellwether index moving within a band of 100 points.

The Sensex alternating between the positive and negative territories remained in the red for most part of the day. Yielding to pressure from the bulls, who, for long had been waiting on the sidelines, took a deep dive into the red in the post-lunch session.

The bears, however, could not rein in the positive sentiment that was on Reliance and ICICI Bank, which helped the index close with a marginal decline of about 4 points.

The S&P CNX Nifty moving on similar lines reflected a similar pattern with the index moving within a band of 35 points.

In the morning session the Nifty touched an intra-day high of 2334.9 points, however, it lost all of its gains in the post-lunch session to close almost flat at 2322.5 points.

The auto sector also registered wide spread declines, which included two-wheelers, auto components and tyre stocks. LML, Hero Honda, Ucal Fuel Systems, Shanthi Gears, Hindustan Motors, Mothersun Sumi, Goodyear, Sundram Fastners and Asahi India shed more than 3 per cent. Rico Auto, Sona Koyo Steering and M&M were among the few notable gainers.

The metal sector took a beating with the sector-oriented index on the BSE losing 1.5 per cent.

Quite a number of mid-cap stocks in the sector lost value. Leading the pack were Binani Industries, Man Industries, Tinplate, Maharashtra Seamless, Lloyd Steel, Welspun Gujarat and Southern Iron all of which registered declines of more than 3 per cent.

The differences on sugar prices between Pakistani buyers and the Indian sugar mills remaining unsettled coupled by a US firm bagging an order for sugar from Pakistan appear to have upset the cart for sugar mills in India. Sugar stocks Bajaj Hindustan, Upper Ganges, Dhampur Sugar and Balrampur Chini lost more than 3 per cent.

The banking sector yielded to pressure from bears with a large number of stocks registering declines. Leading the pack were Union Bank of India, Bank of India, Bank of Baroda, Andhra Bank, Kotak Bank and Canara Bank all of which shed more than 2 per cent.

Profit booking took place on the counter of Chemfab Alkalis that had been on a sharp bull run since July has shed 14.67 per cent since a week ago.

The stock, which opened on a strong note, went down hill in the afternoon session. The nosedive in the closing hours shaved of Rs 20. Other losers in the chlor-alkali sector were Gujarat Alkalies, Punjab Alkalies, Sree Rayalaseema Alkalies, Bihar Caustic and Kanoria Chemicals.

Frontline stocks in the oil and gas sector, Savita Chemicals, BPCL, Reliance, IOC and ONGC helped the index on the BSE inch its way northwards to register a gain of 0.7 per cent.

In the hospitality sector, Asian Hotels, Hotel Leela Venture, Indian Hotels and EIH shed value. Taj GVK, however, registered a marginal gain of 0.8 per cent.

Prominent gainers among the Nifty constituents were Sun Pharmaceuticals, BHEL, Cipla and L&T.

Significant losers on the Nifty were Colgate, VSNL, SAIL, MTNL, Tata Steel, Dr. Reddy's, Gujarat Ambuja and HCL Technologies.

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