The Hindu Business Line : Stocks search for direction on lacklustre day

It was a kind of day that stocks have not witnessed for several weeks now, as they have marched to new highs. On Wednesday, equities appeared to, however, have run out of steam, as they ended the day on a flat note.

It was, however, a much-needed breather and the interesting aspect to watch out now will be: is this the start of a corrective phase or just a pause in the ongoing bullish phase.

Click here for table

Profit booking and lacklustre trends in institutional buying contributed to an insipid day on which the only highlight was the firm undertone in several of the recent listings; sugar stocks, too, had yet another fine day though it was not as sparkling as the rich gains of past couple of days.

Hero Honda shone in the ranks of large-cap stocks with a gain of about 4 per cent. The index leaders in terms of market cap - Reliance, ONGC and NTPC - ended the day with gains; this was, however, neutralised by losses suffered in other index plays. Value buying appears to have emerged in Ranbaxy after it has lost a significant patent challenge on Lipitor to Pfizer. Or is it a relief rally for this battered health-sector play?

Benchmark indices ended the day with marginal losses; Nifty, Sensex, CNX 100 (Nifty + Nifty Junior) and the broad-based CNX 500 were closely bunched together as they shed value. The only outlier was the index tracking banking sector stocks, as it lost about 1.5 percentage points. Investor attention was focused on the large-cap space as far as profit taking was concerned. Interestingly, several stocks in the mid- and small-cap category did post sizeable gains, which ensured that the BSE Mid-cap and BSE Small-cap indices closed in positive territory.

It was a day on which the bulls and bears squared off and came off without any conclusive outcome. This was reflected in the advance-decline trends. Advancing stocks and declining stocks were evenly matched in almost every category. On such a lacklustre day, stocks such as Amara Raja Batteries, Orient Paper, Zenith Computer, Bhartiya International and Visesh Infosystems hit the upper circuit filter. In line with the trends in the protracted bull market in recent months, only stocks of obscure companies populated the lower circuit filter list. In event-specific action:

VisualSoft Technologies was marked up on news flow of merger of two closely held companies with the listed outfit and the announcement of swap ratio for the exercise.

Hotel Leelaventure ruled firm as it announced acquisition of properties in Chennai and Hyderabad.

Banking sector stocks came under selling pressure with SBI and Punjab National Bank leading the way. Several other PSU banking stocks, too, shed value while most of their private sector counterparts bucked the trend to close with either marginal gains or losses. In other sector trends:

Engineering sector stocks were marked lower across the board barring a few such as Voltas.

Frontline IT stocks such as Wipro, TCS and Satyam Computer lost steam while Infosys managed to stay afloat with gains. Apart from VisualSoft, which was driven by news, flow, Patni Computers was the only notable gainer.

A few logistics players such as Gati and Blue Dart were prominent gainers though Aegis Logistics had an indifferent outing, for a change.

Companies providing material support to the construction sector were in the limelight. Greenply, Novopan and Kajaria Ceramics figured in the list of small-cap gainers.

New listings such as Everest Kanto Cylinders, Kernex Microsystems, ABG Shipyard and Vikash Metal consolidated on gains while the high-flying Sree Renuka Sugars was the only prominent loser among sugar sector stocks.

Other prominent gainers were Sterlite Optical, Zenith Computer, Gujarat Gas, India Infoline, Fedders Lloyd, McDowell, GTN Textiles, Saregama, Jaiprakash Associates and K M Sugar Mills.

Notable in the losers list were Bhansali Engineering, Sutlej Industries, Heritage Foods, Onward Technologies, ACC, Apollo Tyres, Indo Gulf, Assam Company, Videocon Industries and DCM Shriram Consolidated.