The Hindu Business Line : Markets decline on back of profit booking

Fall in crude prices and gains in the US market on Tuesday failed to impress the domestic market which, instead, fell in line with Asian markets, which closed in the red.

Signals from FIIs also appeared cautious. Overseas investors were net sellers to the tune of Rs 294 crore on Tuesday.

Most of the sector indices also closed in the negative. Auto and oil segments, however, showed some resistance, ostensibly on the back of lower crude oil prices.

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The overall market breadth was negative, with declining stocks outnumbering the advances by a ratio of 1.6:1.

Buzzing stocks

The pessimism in the market did not stop the stellar rally of Rama Newsprint & Papers. The stock gained 18 per cent on Wednesday to Rs 56.3.

The stock of Crompton Greaves added Rs 13 or 5.4 per cent to close at Rs 253. It rose as much as 11.6 per cent intra-day.

The rally was on the back of plans to issue bonus shares. The company's board will meet on October 14 to consider the bonus. Second-quarter earnings and an interim dividend will also be announced on the same day.

Provogue, Eicher Motors, Gulf Oil Corporation and Binani Industries were some of the stocks that hit the upper circuit filter.

Sector focus

Auto stocks remained positive for most part of the day but yielded to bear pressure towards the end. Maruti Udyog, Mahindra & Mahindra and Hero Honda Motors ended in the red.

However, select stocks such as Tata Motors and Bajaj Auto managed to hold on to their gains. Tata Motors gained on the back of a 23.8 per cent increase in September vehicle sales.

Jet Airways and Deccan Aviation made marginal gains. Expectations of reduction in aviation turbine fuel (ATF) price on approval of the new aviation policy have provided support to these stocks.

The new policy has a proposal to allow private players to sell ATF to flights at domestic airports.

Sugar stocks witnessed buying interest. Dhampur Sugar, Bajaj Hindusthan Mawana Sugars and Dwarikesh Sugar moved northwards. Record crop of crane in Maharashtra has prompted a number of sugar mills in the region to crush cane three weeks in advance.

New listing

Gwalior Chemical Industries made its debut at 11 per cent premium over its offer price of Rs 81. The stock closed at Rs 94 and recorded over one crore volumes.

Stock-specific action

The Maharashtra State Electricity Regulatory Authority has allowed Reliance Energy and Tata Power to raise tariffs and recover earlier rebates in Mumbai. The stocks failed to attract market enthusiasm and closed in the red.

Welspun-Gujarat Stahl Rohren has formed a joint venture with a Russian company that is a leading maker of pipes for the oil and gas transportation sector. Welspun-Gujarat will own 40 per cent stake in the venture. The news did not propel the stock, which closed weak.

Mirc Electronics, Atlanta, Shreyas Shipping, Shringar Cinemas and KEI Industries were prominent gainers at the NSE.

India Infoline, Sesa Goa, Educomp Solutions and Prime Securities were conspicuous losers. Cyber Media, Asian Paints, Bartronics and 3i Infotech were some of the stocks that witnessed strong surge in volumes.