The Hindu Business Line : Markets wilt in grip of bears; oil and metals worst hit

A day after the investing public and the Government heaved a sigh of relief over the rally at the stock markets on Tuesday, the vice-like grip of bear operators left it gasping for breath on Wednesday.

The mid-week session witnessed another round of sell-offs during various points of the trading hours, none as intense as the last few minutes of trade, leading to a hurried decline in the benchmark indices.

GENERAL MARKET TREND

Both the benchmark indices - the BSE Sensex and the NSE's S&P CNX Nifty - opened on a marginally positive note; after a mild slide downwards during the first hour of trade, they quickly climbed back into the black.

By noon, the indices had touched a high of 11,000 points and 3,250 points respectively.

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But the sentiment turned distinctly bearish immediately afterwards. For the remaining part of the trading session, the indices were on a roller-coaster ride, with buying support and profit-booking alternating, even as the overall effect was a consistent drag on the indices.

As the final hour of trade approached and the indices seemed to be stabilising, another surge in profit booking pushed the benchmarks deeper into the red.

Finally, the indices closed down by over 2.3 per cent at 10,573 points and 3,115 points respectively. Wednesday's trading session has reiterated that volatility has not yet left the markets.

SECTOR FOCUS

With the continued rise in the price of oil and the decline in the prices of metals in the international markets, the sector stocks that took the biggest hit were the ones from the oil and gas and metals spaces.

Other than these sectors, stocks from segments such as automobile, FMCG, capital goods and public sector undertakings were also hit.

Banking, pharma and consumer durables had a mixed day. There was also a much lower level of profit booking among stocks in the mid-cap and small-cap segments.

In fact, quite a few stocks from this segment were actually being cherry-picked by institutional investors after the carnage of the last few trading sessions had brought them within attractive valuation levels.

Buzzing stocks

Thermax has posted a near doubling of bottomline with a net profit after tax of Rs 123.3 crore for the year ended March 2006, from Rs 55.3 crore the previous year.

Total income stood at Rs 1,498 crore (Rs 941.2 crore). The stock was down four per cent at about Rs 290.

The board of Exide Industries has informed the stock exchanges that it is considering a proposal to split the company's stock, which currently has a face value of Rs 10. The stock was up over 3.6 per cent at Rs 267.

Dishman Pharmaceuticals & Chemicals Ltd has announced that it has reached an agreement to purchase the pharmaceutical services business of Solutia, a European group, comprising two companies - Carbogen AG and AMCIS AG - for a consideration of $74.5 million, which includes working capital of $8 million. The stock was however, down 3.6 per cent.