The Hindu Business Line : End of another traumatic week

EQUITIES took a pounding and ended a week that has been one of the more traumatic one in several months. As FIIs continued to take profits and profit booking remained rampant, stocks cutting across a wide swathe ended the day deep in the red. Metal stocks lead the decline on a day when the only spot of cheer in the large-cap space was Bharti Tele-Ventures.

Declining stocks outpaced advancing stocks by a factor of four, indicating the breadth of weakness in the market. In the large-cap stocks, the weak trend was more pronounced with five declining stocks for every gainer. National Aluminium, SAIL and Tata Motors led the decline in the Nifty. That the biggest gainer in absolute terms rose by less than Rs 50 conveyed the mood on Dalal Street. Only two obscure stocks hit a new high on the BSE, yet another indicator of how lacklustre the day was for equities. Mid- and small-cap stocks continued their losing streak shedding more value than their large-cap brethren.

The earnings season did not bring cheer with several companies in the mid-cap and small-cap space reported moderate earnings growth; a few did show decline in earnings as well. Markets also appeared to be apprehensive of imminent earnings numbers due over the next few days; nowhere was this clearer than the decline in the Hindustan Lever stock; the company is to report earnings on Monday to wind up the earnings season.

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In company-specific action:

* Bharti Tele-Ventures posted gains in excess of 5 per cent driven by the news of Vodafone's plan to take a 10-per cent stake in the company in a deal that values the company at $15 billion (about Rs 67,000 crore) and each share at Rs 351; in the process, the Bharti stock recouped most of the losses in Thursday's trading when markets gave the thumbs down to a robust earnings card;

* Sun Pharmaceuticals was the only other prominent gainer in the Nifty basket aided by impressive earnings numbers;

* Maruti did not, however, find favour despite robust earnings driven by rising sales of Swift and Alto; TVS Motor suffered a similar fate;

* On completion of a fund mobilisation programme in the overseas markets, Orchid Chemicals tumbled shedding more than 10 per cent; and

* Aurionpro Solutions — a recent listing — continued its losing streak and the stock has now shed most of the gains on listing earlier in the week.

Ferrous or non-ferrous did not matter, as investors took a dim view of the metals sector and hammered stocks such as Tata Steel, Jindal Steel & Power, Ispat Industries, Essar Steel and Hindalco, to name a few. One other sector where stocks took a knock almost without exception was automobiles. The likes of Tata Motors, Maruti, Hero Honda and Ashok Leyland led the downward trend even as the possibility of buoyancy in demand during the festive season receded in the minds of investors.

It was a mixed day at the office for banking sector sectors; several public sector banks were marked lower. The index tracking stocks in this space did, however, end the day with the least declines aided by gains in ICICI Bank, UTI Bank and Bank of India.

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