The Hindu Business Line : Bear hug chokes frontline stocks

THE markets witnessed all-round selling on Thursday. The Sensex fell to a three-week low of 8376.9 - down by 163.6 points or 1.9 per cent. Pessimism reigned high in the frontline stocks while mid-cap stocks were relatively less affected. The S&P CNX Nifty closed at 2537.3- a decline of 52 points or 2 per cent.

Markets opened on a weak note following the weak global sentiments but managed to touch positive grounds with an intra-day high of 8547.8. The optimism was short-lived as profit-booking took over for the rest of the day, till close of trading session. Positive quarterly results of companies across sectors failed to lend optimism. The market breath was negative with declines outnumbering advances in the ratio of 2.6:1.

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In the basket of BSE 30, Ranbaxy led the losers' pack with a decline of 6.3 per cent to Rs 458.4. The company lost to Pfizer in the Lipitor-drug case in a London court. Tata Steel, Dr Reddy's Laboratories and Hero Honda were other frontline stocks which ended in the red.

ITC, Cipla and BHEL managed to stay in the positive turf but failed to impress. BHEL bagged an order worth Rs 82 crore to supply transformers to the Jindal Group.

Banking, metals and IT were the sectors that were worst hit. The BSE Midcap and Smallcap fell by less than 1 per cent. Mid caps such as Centurion Bank and Cranes Software made smart gains of about 7 per cent while Crompton Greaves declined by 6 per cent.

The BSE Metal Index slipped by about 3.5 per cent and turned out to be the biggest loser among the sectoral indices. While Steel Authority of India lost 6 per cent, Tata Steel and Kalyani Steel lost 4 per cent each.

In the IT sector heavyweights Infosys, Satyam and Wipro ended the day in negative territory. In the mid-cap space Mastek fell by 9.7 per cent to Rs 472. A 24- per cent increase in the company's first quarter profits failed to impress the markets as the stock succumbed to selling pressure. i-flex Solutions was another notable loser in the sector. MphasiS BFL announced a 27 per cent jump in its second quarter profits. The stock remained flat at Rs 259.6.

The bank indices in the BSE and NSE lost over 2 per cent. Bank of India, Punjab National Bank and Union Bank of India were some of the top losers for the day.

FMCG stocks were a mixed bag. Tata Tea, Colgate-Palmolive and Gujarat Ambuja Exports closed in the green. Nestle, Assam Company and Shaw Wallace failed to weather challenges and ended in the red.

In the oil and gas segment Hindustan Petroleum, ONGC, GAIL and Reliance witnessed declines. Gujarat Oil and Essar Oil, however, made marginal gains.

Stock-specific action

Second-quarter profits of Orchid Chemicals rose seven-fold to Rs 27.2 crore. The stock however closed on a weak note with a decline of 1.5 per cent to Rs 289.5.

Siemens along with Siemens AG of Germany bagged a Rs 1,570-crore order to build transmission network in Qatar. The stock reached an intra-day high of Rs 2,565 before closing flat at Rs 2,493.

Sterling Biotech plans to acquire a facility of Torrent Gujarat Biotech for Rs 55 crore. The Sterling Biotech stock closed lower by 1.5 per cent, while Torrent Gujarat Biotech made smart gains of 5 per cent.

Post-trading session, ICICI Bank announced a 31 per cent increase in profits for the quarter-ended September 2005. The bank plans to issue Rs 7,000 crore through a domestic public issue and an American Depository Shares offer in the US.

Among the Nifty constituents Punjab Tractors, Sun Pharma, Dabur India and Apollo Tyres were notable gainers while HCL Technologies, Zee Telefilms, CMC and Andhra Bank were significant losers.

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