The Hindu Business Line : Selling pressure pulls Sensex down

THE markets posted its third consecutive day of declines on Friday. The Sensex declined by 37 points to close at 8491.5 in a highly volatile market. It has lost about 300 points in the last three trading sessions. After a firm opening and an intra day high of 8586.4, the Sensex succumbed to strong selling pressures and moved to a low of 8410.7.

The S&P CNX Nifty lost 5.1 points to close at 2574. Banking stocks were the worst hit with the BSE Bankex and Bank Nifty shedding about 1 per cent each.

Weakness in global markets and heavy selling by FIIs in Nifty futures in the last few days, may have added to the gloomy sentiments in the market.

Most of the stocks in auto, tech and metals witnessed heavy profit-booking. Heavyweights Infosys, Tata Steel, Cipla and Hero Honda were major losers in the basket of BSE 30 (Sensex). Bharat Heavy Electricals declined after the government delayed plans to sell a stake in the company. Hindustan Lever gained by 3 per cent after Morgan Stanley raised its price forecast on the stock stating reasons of rural and urban demand. Tata Power and Dr Reddy's Laboratories were other prominent gainers.

After the recent buoyancy, auto stocks lost steam and ended in the red. Mahindra & Mahindra, Tata Motors and Hindustan Motors ended in the red. Ashok Leyalnd bucked the trend and rose 2.5 per cent to Rs.29. The company announced a 27 per cent increase in September sales backed by higher local demand.

In the FMCG sector, United Breweries made a smart gain of 15 per cent to Rs 749. Nestle, Dabur and Godrej Consumer Products also closed in the green, while Assam Company and Satnam Overseas failed to weather challenges and ended in the red.

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Banking stocks were heavy losers for the day. Bank of Baroda, Indian Overseas Bank and Canara Bank lost heavily. Kotak Mahindra and UTI Bank, however, managed to make marginal gains and closed in positive territory.

Among the IT stocks while the heavyweights Satyam , Wipro and Infosys stayed out of rally, the small cap stocks such as Moser Baer, GTL and Flextronics managed to evince buying interest.

Disappointing sales number of most cement companies resulted in the stocks closing in the negative territory. Associated Cement Company, Grasim, Kakatia Cement and Madras Cement witnessed profit booking and closed in the red.

The pharma space witnessed smart rally by Dabur Pharma. The stock surged by 8 per cent to close at Rs 60. Ind-Swift Laboratories, Orchid Chemicals and Morepen Laboratories also made marginal gains. Torrent Pharma, Elder Pharmaceuticals and Glenmark were raided by the bears and faced declines.

The metal index in the BSE lost heavily with stocks such as Bhushan Steel, Maharashtra Seamless, Lloyd Steel and Hindustan Zinc losing out to the bears. Welspun Gujarat reversed the general trend with a 6.6 per cent gain to Rs 106.

The media stocks lost further ground. Deccan Chronicle, TV Today and Television Eighteen witnessed incessant profit-booking on Friday.

Company-specific action

Jet Airways gained Rs 71.5 or 6.1 per cent to Rs 1,236.7. This is the company's biggest gain since listing. The company has announced that it plans to increase the airfares by 10 per cent.

Ranbaxy rose 1.3 per cent to Rs 525.5. The company got approval from the Food and Drug Administration to sell a diabetes drug in the US.

KEC International secured two new orders worth $36 million (Rs 159 crore) from the Afghanistan Ministry for supply and construction of transmission lines. The stock rose marginally by 0.6 per cent to Rs 237.1.

Among the Nifty constituents, Biocon, Patni Computers, Tata Power and Siemens were prominent gainers while MTNL, Cochin Refineries and Andhra Bank were conspicuous losers.

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