The Hindu Business Line : Edgy Sensex ends marginally weak

Trading highlights
Markets keenly await Fed meeting
IT and Auto stocks surge while banking counters remain weak
Engineering stocks that predominantly cater to the electricity sector were in focus

The markets ended on a marginally negative note after swinging 295 points intra-day to nearly touch a low of 9,900 points. The US Central Bank announcement on interest rates is expected on Thursday. A more than expected hike could send yet another negative wave through global equity markets.

Emerging markets have been very edgy over the past few days in the run up to the announcement.

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Among sector themes, technology and auto outshone the broad markets while banking took a hit. Select engineering stocks, especially those with a major exposure to the power sector closed in the green. Mid and small cap stocks languished after a brief bounce back last week.

Select engg stocks up

Engineering stocks that predominantly cater to the electricity sector were in focus as value buying appears to be picking up in a small way. ABB, BHEL, Areva T&D, Crompton Greaves, KEC International, Bajaj Electricals and Thermax were some of the major gainers. Kirloskar Oil, AIA Engineering and Cummins too closed in the green. Praj on the other hand lost most of gains made yesterday. The stock had spiked yesterday on news of bagging an order. The BSE Capital goods index lost nearly 0.82 per cent for the day.

Stock specific action

Ranbaxy fell after a UK appeals court rejected the company's challenge to Pfizer Inc.s main British patent on cholesterol drug lipitor. Lipitor generated almost a quarter of the company's global sales in 2005.

Reliance Industries contained the loss in the broad indices. The stocks rose after it outlined its plans to enter the retailing business at its annual meeting.

Positive results announcements lifted stocks such as Birla Corp and Pfizer India. Pfizer India gained marginally after it announced that it has doubled profit in the second quarter of 2006. Birla Corp announced a 76 per cent rise in fourth quarter profit.

Sector specific action

IT and auto topped the list of gainers. Among IT stocks TCS, Wipro and GTL were the major gainers, with GTL gaining almost seven per cent. Among auto stocks M&M led the pack.

Bank stocks took a severe beating on fears of a further rate hike. Federal rate hike, expected tomorrow could have an impact on RBI's interest rate policy. Fears that an interest rate hike may shrink spreads and profitability could have sent jitters through these stocks. Corporation Bank led the losers list with a 3.6 per cent fall. Canara Bank, ICICI Bank and SBI too followed.

In the mid cap space, sugar and select construction stocks were on the buy list. DCM Shriram and Shree Renuka Sugar perked up on good rise in volumes. Nagarjuna Construction and Hindusthan Construction too appeared on the gainers list while IVRCL slid marginally.

GE Shipping was a star performer. Low valuations and good dividend yield and expectation of value unlocking from the impending demerger could have spurred fresh interest in the stock after the recent fall.

Amararaja Batteries, Engineers India, Greenply Industries and India Infoline are some of the other prominent gainers.