The Hindu Business Line : Weak sentiments haunt markets

Markets failed to take cues from recovering Asian markets as weak sentiments continued to haunt the trading session on Monday. While the opening session began on a weak note, markets took a plunge towards close of trade. The day's decline turned out to be the biggest in the last two weeks. Speculation over rise in interest rates in the US may have added to the pessimism witnessed. However, Asian markets, barring Hong Kong closed higher.

The advance decline ratio was decidedly in favour of the bears with declining stocks outnumbering advances by a ratio of 5.7:1.

Buzzing stocks

Among the basket of BSE 30, HDFC Bank stood firm and closed with a gain of 2.7 per cent even as all the other heavyweights succumbed to selling pressure.

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On a day splashed with red, Unitech and Eicher managed to hit the upper-circuit filter and closed 5 per cent higher.

Tata Coffee was in the limelight for most part of the day and added Rs 5.6 or 1.7 per cent.

The company plans to acquire US-based coffee retailer Eight O'clock for $220 million (Rs.1,012 crore). Tata Coffee will enter the coffee business in US with this acquisition. The stock opened 20 per cent higher before settling at Rs 331.2.

Sector focus

The BSE Metal index bore the brunt of the bear attack with a decline of 7 per cent.

Frontline steel stocks, including Tata Steel took a nosedive even as the Arcelor-Mittal Steel deal began to take concrete shape in another part of the globe.

Sterlite Industries closed 10 per cent lower, while SAIL and National Aluminium lost in the range of 7-8 per cent.

Engineering stocks were next in line to be beaten up. Siemens, Larsen & Toubro, Crompton Greaves and Praj Industries closed with heavy declines.

Capital goods have been major losers in the market dip since mid-May.

Cement stocks appeared to develop cracks as frontline and second-rung stocks in the sector slid rapidly.

Heavyweights Grasim Industries and Gujarat Ambuja Cements ended weak even as Birla Corporation and India Cements lost 8-9 per cent.

Dalmia Cement and Mangalam Cement were other notable losers in the space.

Real estate plays Ansal Properties & Infrastrucure, D.S. Kulkarni Developers and Ansal Housing & Construction ended on a weak note. SEBI announced the rules for real estate funds after close of markets.

Stock-specific action

Power-transmission equipment maker KEC International won orders worth Rs 198 crore to build two power distribution lines. Power Grid Corporation awarded the orders. Markets failed to factor the order book as the stock closed lower.

Mahindra Gesco Developers closed in the red after markets failed to respond to reports of the company developing a special economic zone in Rajasthan.

Post trading, Hotel Leela Venture announced a stock split of each share of the company into five shares of Rs 2 each.

India Motor Parts & Accessories, Sanghi Polyesters, Mukand Engineers, Shipping Corporation of India and Balkrishna Industries were prominent gainers among the Nifty constituency.

Satnam Overseas, Suzlon Energy, R Systems International, Allcargo Global Logistics and Vaibhav Gems were conspicuous losers.