The Hindu Business Line : Profit-taking checks market progress

FRESH after a massive near-200 points rebound on Tuesday; the stock markets witnessed considerable volatility on either side of the index band during the mid-week session on Wednesday.

The 197-point recovery on Tuesday managed to more than wipe out the 171-point slid of the previous day, but though the euphoric sentiment was carried forward into the beginning of the session on Wednesday, the upbeat mood did not last long.

Click here for table

The markets opened on strong note with a continuation of the kind of buying that helped the previous session post healthy gains. But no sooner had the benchmark indices crossed an intra-day gain level of about 0.7 per cent, hesitancy set in.

The sudden drop in confidence levels during mid-session meant that there was a distinct lack of buying support. On the contrary, a quick build up of selling pressure, triggered by profit booking in key index heavyweights lead to a protracted slide in the indices.

There were pockets of buying support throughout the day's session and towards the close of the day's trading there was a bit of a revival in interest that helped the indices post a relatively better close compared to the day's low. By the end of day, the indices had yo-yoed within a fairly large points range deep into positive and negative territory. The Bombay Stock Exchange's Sensitive Index, for example, had swung between a 143-point range and the National Stock Exchange's Nifty had swayed within a wide 43-point span.

At the BSE, the Sensex had opened at 9,292 points and after hitting an intra-day high of 9,350 points, slid to a low of 9,207 points, before closing at 9,257 points, a fall of over 25 points. There were two Sensex shares that fell for every share that gained during the day. The total traded value of Sensex stocks on Wednesday was Rs 1,218 crore.

The National Stock Exchange's S&P CNX Nifty index was deeper in the red with a 0.42 per cent loss on Wednesday. After a fall of about 12 points, the 50-share Nifty index closed the day at 2,794 points. Amongst the most active stocks at the NSE were Reliance Industries, Titan Industries, HCL Technologies, State Bank of India, Satyam Computer, Reliance Capital, VSNL, Tata Motors, ICICI Bank and Infosys Technologies.

The fall in the prices of blue chips and the consequent fall in the indices seemed to have been triggered by the general lack of indicators regarding the direction that the markets will take during the New Year. Overall the market also seemed to be consolidating and the poor sentiment in the market on Wednesday was not restricted to specific sectors. Stocks in the auto, engineering, cement, energy, steel, telecom, information technology and banking were all seen lower after bears hammered down their prices.

Amongst the biggest losers from out of the BSE Sensex were ACC, Bajaj Auto, BHEL, Hero Honda, Hindalco, ITC, L&T, ONGC, Reliance Energy, Tata Motors, Tata Power, Tata Steel, TCS and Wipro. The few gainers from out of the Sensex stocks were HDFC and NTPC - both up 1.8 per cent, Grasim Industries - up one per cent, State Bank of India - up 0.8 per cent and Reliance Industries - up 0.65 per cent. The other gainers were Dr Reddy's Laboratories, Gujarat Ambuja Cements, Hindustan Lever, Ranbaxy Laboratories and Satyam Computers.

Though the benchmark indices were down and the general breadth seemed outwardly to be bearish there were pockets where considerable gains were posted on Wednesday. This included the public sector undertakings segment, the mid-cap stocks segment and the small-cap stocks sector of the market. This was evident from the gains that the sectoral indices had posted at the BSE.

The BSE PSU index was up 0.43 per cent, BSE Mid-cap was up 0.27 per cent and the BSE Small-cap index was up 0.13 per cent.