The Hindu Business Line : Choppy session ends on a flat note

THE markets saw yet another day of volatility before closing on a flat note. The Sensex rose 0.9 points to 8222.6. Friday morning saw the markets open on a positive note. The bears soon took control and profit-booking dragged the markets deep into the red.

The benchmark index swung 29 times between gains and losses reflecting the choppy trading session witnessed during the day. The index gained as much as 1.3 per cent and fell by 1.2 per cent in its intra-day high and low respectively. The BSE Midcap and Small cap indices made slow recovery while the BSE banking index fell by 0.5 per cent. The S&P CNX Nifty closed at 2477.75, up 1.25 points.

Mixed interest was seen in index heavyweights. While HLL, Grasim Industries and ICICI Bank rose by 3-4 per cent, HDFC Bank, Dr. Reddy's Laboratories and Satyam Computer were invaded by the bears.

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The slow recovery in mid-cap stocks could be seen in the buying interest shown in select stocks such as Visual Soft, Harrison Malayalam and Amtek Auto. Cranes Software, Astra Microwave and United Breweries, however, succumbed to selling pressures.

Decline in oil prices after forecasts that Hurricane Rita would spare the main US oil refining region near Houston, built market confidence in the auto segment. Ahead of September sales figures, Mahindra& Mahindra, Hindustan Motors and Maruti Udyog ended in positive territory. Tata Motors gained 2.7 per cent to Rs.514. The company has signed an MoU with Fiat for development and manufacturing of products and components.

Cement sector remained buoyant. While the heavy weights Gujarat Ambuja Cement and Associated Cement gained about 1-2 per cent, India Cement made a smart gain of 6 per cent to Rs.102. OCL India rose by 6 per cent to Rs.151 on reports of DSP Merrill Lynch and Prudential ICICI Asset Management acquiring 7.4 per cent stake in the company.

Pharma stocks were a mixed bag. Even as heavyweights lost favour, Dishman Pharma, Apollo Hospitals and Lupin continued to attract buying interest and moved northward. Glenmark Pharmaceuticals gained 3.3 per cent to Rs 322. The company has filed to commence the first phase of human trials on its prospective diabetes drug molecule in the UK.

The mid-caps were in action in the IT space. Sonata Software and Moschip Semiconductors rallied smartly. Hexaware Technologies was also in the limelight after it bagged two orders valued at $5 million (Rs 22 crore) for testing services from companies in North America and Germany. HCL Technologies, CMC and Patni Computers stayed out of rally.

Both the BSE Bankex and Bank Nifty shed about 0.5 per cent. HDFC Bank led the losers' list with a decline of 3.7 per cent. UTI Bank, Union Bank of India and Canara Bank followed suite while Punjab National Bank refused to yield to bearish pressures and closed with a gain of 2 per cent.

Stock-specific action

Hindustan Construction surged by 5.1 per cent to Rs 830.9. The company won an order worth Rs 1,080 crore to build tunnels and dam in Jammu & Kashmir and Himachal Pradesh.

McDowell & Co jumped by Rs 24.6 to Rs 424. The gain can be seen on the back of the company's plan to absorb Herbertsons and nine other units and divest the investment division to McDowell India Spirits.

Ceat plans to come up with a rights offer at Rs 50 per share to expand business. The rights ratio will be 3 shares for every 10 equity shares held. The stock rose 5.4 per cent to Rs 94.6.

Prominent gainers among the Nifty constituents were Zee Telefilms, Jaiprakash Associates, Nicholas Piramal and Chennai Petroleum. SAIL, Dabur, Indian Overseas Bank and Polaris were conspicuous losers.

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