The Hindu Business Line : Markets fall off the highs; IT stocks lose sheen

Trading highlights
IT stocks cause a downturn in the bellwether indices
Across-the-board gains recorded in the sugar sector
The tea sector appears to have cooled off

The markets opened with renewed vigour on Tuesday. The bulls appeared in full strength to help the bellwether indices reach new highs. During intra day trade, the Sensex crossed yet another milestone, touching a high of 11,017 points.

However, selling pressure set in almost immediately, hammering the Sensex well below the 10,900 mark. Sharp declines in IT stocks appeared to have pushed the bellwether indices lower. The advances-declines ratio was tipped in favour of the losers, which reflected the bearish sentiment that prevailed towards the close.

Buzzing stocks

Market participants appeared to have turned their attention from Reliance Natural Resources to Reliance Communication Ventures; about 76 lakh shares changed hands on the BSE. Other stocks in the limelight were BL Kashyap & Sons, GTL, Bank Of India, Dena Bank and Escorts. Nitco Tiles, which made its debut, was also in the focus.

Sector Watch

The sugar sector was upbeat on Tuesday with many stocks recording sharp gains. Among the top gainers were Bajaj Hindustan, Dwarikesh Sugar, Mawana Sugars, and Renuka Sugars, all of which gained more than 5 per cent. Balrampur Chini Mills, Oudh Sugar, Rajshree Sugars, Sakthi Sugars and Thiru Arooran Sugars gained more than 1 per cent each. However, Dhampur Sugar bucked the trend shedding about 0.8 per cent.

Dipping tea prices appears to have taken its toll on the industry. Widespread declines were registered in the sector. Frontline stocks in the industry — McLeod Russel and Williamson Tea Assam — declined by more than 4.5 per cent. Others that topped the losers list included Goodricke, Harrisons Malayalam and Assam Company. The negative sentiment also crept into Tata Coffee and Bombay Burmah, which also own coffee plantations. However, Dhunseri Tea and Warren Tea gained about 4.5 per cent each.

Across-the-board declines were registered in the chlor-alkali industry. However, declines were minimal. Gujarat Alkalies, Siel and Chemfab Alkalis lost more than 1 per cent. Kanoria and Andhra Sugars were the other prominent losers.

Event-specific action

Accompanied by heightened activity, the Teledata Informatics stock surged by 7.8 per cent, volumes jumped eight-fold on its counter.

Market participants appeared to have bought on announcements that the company had through its subsidiary acquired a 100 per cent stake in Alpha Soft Services Corporation of the US, which provides services in Enterprise Resource Planning (ERP) and Data Warehousing.

Bata recorded a sharp rise of about 12 per cent on buying activity. A sharp rise in volumes was also registered on the stock as market participants appeared to be enthused by the company's plans to develop its real estate.

Stock-specific action

Accompanied by a 10-fold rise in volumes, Godrej Industries recorded a sharp rise. The stock has been on an uptrend ever since March 14 when it announced plans to transfer its foods business, excluding its Wadala facility, in Mumbai to Godrej Tea. The stock closed with a gain of about 15 per cent.

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Khandwala Securities registered a smart recovery on the back of sharp decline on Monday. The stock, which was subject to selling pressure yesterday, closed with a 16 per cent gain on Tuesday.

Prominent gainers/losers

BHEL, SAIL, Cipla, GAIL and Bharti were among the prominent gainers. Zee Telefilms, Tata Motors, Dabur and Wipro featured in the losers list.