The Hindu Business Line : Bear hug pushes heavyweights to negative territory

MARKETS opened weak on Tuesday dominating early in the trading session. Bear-domination, however, slipped closed to noon with the bulls appearing after a day's hiatus. For a brief session, the markets appeared to be moving on a positive note with the bellwether indices trading in the green.

The bears, however, regained control of the markets with many of the indices closing in the red. The advances-declines ratio at 1:2 in favour of the losers highlighted the negative sentiment that prevailed in the market.

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The BSE Sensex opened on weak note just above the 8600 mark. Early in the session, domination by the bears was evident as many of the index constituents traded in the negative territory. A brief respite helped the index touch the day's high of 8664.5 points.

However, later in the day, bears were out in full force hammering the index down by 76 points to close at 8535 points.

A similar trend prevailed on the S&P CNX Nifty with the index shedding 1.14 per cent to close at 2572.9 points.

Most indices on the BSE closed in the red with the exception of the consumer durables and capital goods indices. PSU and banking indices registered declines of more than one per cent.

Sentiment on the PSU counters turned negative on Tuesday after a positive sentiment swept the sector on Monday. Widespread bear domination was evident in this sector. For every one stock that advanced on the BSE-PSU, nine declined even as the index registered a decline of 1.4 per cent.

Banking stocks - Oriental Bank of Commerce, J&K Bank, Punjab National Bank, Union Bank and IOB -were among the prominent losers in the sector. The others included Bongaigaon Refinery, ITI and HMT.

The steel sector slipped further with frontline stocks such as Tata Steel, Essar Steel and Ispat Industries declining by more than 3 per cent. Other losers included Lloyd Steel, Nav Bharat Ferro and Southern Ispat. SAIL and Sesa Goa registered moderate declines. Negative sentiment also prevailed in the aluminium space as Hindalco, Madras Aluminium and Nalco registered declines. India Foils was the only prominent gainer.

Stock-specific action

Ranbaxy declined by 3.5 per cent on flat volumes after information flowed that Astra Zeneca filed an appeal against Ranbaxy in the US alleging violation of patent norms.

Buying interest was evident on L&T's counter as volumes trebled on information that it bagged orders worth Rs 252 crore from NTPC, Power Grid Corp of India and Bhutan Power Corp. It closed with a gain of 1.5 per cent.

Cadila Healthcare announced that it received approval from AFSSAPS, the French regulatory agency, for marketing of its sertraline capsules in France. The stock registered a one-per cent gain following Monday's gain of 1.5 per cent.

KPIT Cummins has entered into agreements to acquire majority stakes in SolvCentral.com of the US and Pivolis of France for $2 million and 1.75 million euro respectively.

SolvCentral.com provides business intelligence solutions for and Pivolis offshore consulting services.

Though volumes doubled on its counter, the negative sentiment that prevailed in the IT sector crept into the stock ensuring a one-per cent decline.

Accompanied by a two-fold rise in volumes Madhucon Projects closed with a three-per cent gain after announcements that it had bagged orders worth Rs 360 crore from NHAI for construction of roads on BOT basis.

VSNL has forged an alliance with the Indian operations of Microsoft to enter the web conferencing market. The positive announcements failed to generate interest on its counter as volumes remained flat on its counter.

Major losers on the Nifty included Jet Airways, Maruti, ONGC, SCI, BPCL and HDFC. Gainers included Tata Tea, ACC and M&M.

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