The Hindu Business Line : Selling pressure puts paid to initial hour rallies

ON Monday, the markets recorded high volatility with many of the indices moving within a per cent band. The markets were stretched on both ends, the bears, however, managed to have the last laugh.

Almost all indices on the BSE closed in the red with the exception of technology and FMCG oriented indices.

Negative sentiment was evident in the advance-declines ratio, which was in favour of the losers at 3:1.

The BSE Sensex opened on a strong note; selling pressure in the initial hour took its toll on the index. The initial hour was marked by volatility with the Sensex zigzagging its way to the 8460 levels.

The index bounced back to step into the positive territory moving for about three hours in the green. Selling pressure in the last hour, however, pushed it back into the red.

Technology majors - Infosys, Bharti and Wipro mitigated the slide in the Sensex, which closed with a marginal drop of 7.7 points.

Moving on similar lines, the S&P CNX Nifty within the initial minutes of trading hit the day's high of 2595.15. However, pressure from bears pushed it into the red. The index then stepped on a recovery mode that lasted until the early hours in the afternoon session. The bears resumed control in the last hour and a half pushing it back to 2566.85. The index recorded a drop of 0.28 per cent on a volatile day's trade.

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The BSE FMCG index registered a modest gain of 0.78 per cent. Major gainers in the FMCG space were KRBL, Gillette, Emami, Britannia and United Breweries.

Market participants were equally split among tobacco players as ITC and Godfrey Phillips gained while VST Industries and GTC recorded losses.

Bata, Liberty Shoes, Shaw Wallace and Eveready Industries were among the major losers.

The IT space recorded sharp gains, dragging along with it the BSE TECk Index. Prominent gainers among technology stocks were Aztec Software, iGate Global Solutions, Rolta India, Sonata Software, Megasoft, Himachal Futuristic and Opto Circuits.

Television stocks - Zee Telefilms, TV Today, Television Eighteen and NDTV - figured among the losers.

The plantation sector was bearish with many of them recording sharp fall. Prominent among them were Apeejay Tea, Assam Tea, Bombay Burmah, Dhunseri, Goodricke and Tata Coffee.

Bearish sentiment was also evident among the chlor-alkali players with Punjab Alkalies and Bihar Caustic shedding more than three per cent.

Stock Specific Action: Yes Bank reported second quarter earnings of Rs 14.25 crore on the back of 27-per cent rise in interest earnings (compared to the previous quarter). Investors appeared to be unimpressed by a 26-per cent rise in earnings (compared to the previous quarter) as the stock ended on a flat note despite a three-fold rise in volumes.

IVRCL announced that it had bagged orders worth Rs 850 crore from NHAI for construction of roads in Tamil Nadu. Higher volumes at about a lakh of shares failed to lift spirits on this stock. The stock ended on a weak note at Rs 789.1, lower by 0.7 per cent.

Indiabulls reported a 5-fold rise in earnings for the second quarter. Heavy buying activity took place on its counter in the initial hours of trade. The stock opened on a strong note, failing to maintain the momentum it slid all the way to Rs 185.2, finally closing just above the red territory.

Marico announced that its subsidiary in Bangladesh has acquired `Aromatic' a soap brand from a Bangladeshi company. Aromatic is estimated to have a market share of 5 per cent in Bangladesh. Supported by buying interest the stock gained 2.8 per cent to close at Rs 294.2.

Chemfab Alkalis reported a 23-per cent rise in earnings for the second quarter last week. Market participants, however, appeared to be unimpressed. Selling pressure took its toll on the stock hit the lower circuit filter. It closed with a sharp drop of 10 per cent at Rs 152.6.

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