The Hindu Business Line : Benchmarks nosedive on late-hour selling

After showing signs of optimism for most part of the day, markets made a nosedive to close in the red. Index heavyweights witnessed selling pressure during the final hour of trade. Domestic markets reflected the subdued sentiments of their Asian counterparts, as a number of them remained passive.

Figures of FII investments on May 29 may also have dampened market sentiments. Overseas investors were net sellers to the tune of Rs 82 crore on Monday. With this, the net selling trend extended to 11 straight days.

Buzzing stocks

Falling rupee appeared to have brightened prospects of IT companies with the BSE IT index gaining 1.4 per cent on Tuesday. Frontline IT company, Infosys, added Rs 61 to Rs 3027.6. Tata Consultancy Services and HCL Technologies also closed with gains.

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Stocks in the small-cap space also attracted attention. Rei Agro, KRBL, Tricom and Satnam Overseas made gains in the range of 8-19 per cent.

Adani Exports, Unitech and Harrison Malayalam surged to hit their upper circuit levels. Numeric Power Systems also hit its upper limit on the back of a 21 per cent increase in profits for the fourth-quarter ended March 2006.

Essar Oil, Ashok Leyland, Hindustan Lever and Gitanjali Gems were stocks that experienced heightened volumes.

Sector Focus

Auto stocks led by Hero Honda took the brunt of the bear's attack for most part of the day. Hero Honda lost 4.8 per cent to Rs 803.7 after the company announced that its margins were under severe pressure. Tata Motors and Maruti Udyog also closed in the red while select stocks such as Eicher Motors and Mahindra & Mahindra managed to move northward.

Metal stocks lost sheen after being in the limelight for a short span in the past few trading sessions. While NALCO plunged down with a loss of seven per cent, Jindal Stainless, Hindalco and Tata Steel succumbed to selling pressure and closed weak.

Construction and engineering space saw momentum in selects stocks on the back of announcements. Larsen & Toubro hit an intra-day high of Rs 2,505 before ending flat. The company along with Japanese engineering player Toyo Engineering Corp. has won an order worth $669 million (Rs 3,065 crore) from IOC, to build an ethylene plant. Nagarjuna Construction added two per cent on the back of plans to issue bonus shares. Engineers India saw a marginal decline after profits for the quarter-ended March 2006 declined by six per cent.

Stock-specific action

EIH surged nine per cent to Rs 707.5. The chain hotel's board will meet on Wednesday to consider issuing free shares to investors.

Shree Renuka Sugars added Rs 5.6 to Rs 1001.8. The company has signed a three-year agreement with Brazil's Copersucar to buy raw sugar and technology for the former's plant to be built in West Bengal.

Tata Power gained two per cent on the back of plans to spend Rs 18,000 crore to double capacity generation to over 4,500 megawatts.

Pricol, Mastek, Zodiac Clothing, Finolex Industries and Morepen Laboratories were key gainers among the Nifty constituents. 3M India, Gujarat Alkalies & Chemicals, Dwarikesh Sugar, ABB and Nahar Spinning Mills ended as conspicuous losers.