The Hindu Business Line : Mid, small-caps take a beating

The winners and the losers in India Inc were all treated alike by the market on Monday. Whether it was Tata Steel, Hindalco and Aditya Birla bagging acquisitions or Reliance Communication losing out on the Hutch deal, they were all drubbed alike.

The bulls were relegated to the sidelines since the beginning of trading session and went deeper into the red as the day advanced. This was the biggest fall for the Sensex since December 19. The day's lop-sided market reaction was reflected in the declining stocks outnumbering the advances by a ratio of 9.3:1.The Asian bourses also closed a mixed bag.

Mid- and small-cap stocks took a pounding with the BSE Midcap and Smallcap indices declining by 4 per cent and 4.8 per cent, respectively. Shree Precoated and Steel Strip Wheels were among the few stocks in the space that still managed to hit the upper circuit filter and closed in the green.

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Among the BSE sector indices, capital goods and metal lost in the range of 5-5.5 per cent. IT and FMCG sectors showed some resistance and minimised loses.

Deals, market reaction

Markets appear to have perceived the deals by India Inc in recent weeks to be expensive. After Tata Steel was punished for what was largely seen as a pricey Corus acquisition, markets targeted Hindalco today for acquiring Novelis, a global leading producer of rolled aluminium products. The company's stock fell as much as 13.7 per cent to Rs 149.4 and is now closer to its 52-week low of Rs 139. Similarly, Suzlon Energy's competitive bid for REPower did not send positive vibes as the stock declined by 13 per cent to Rs 1,080. Reliance Communications was also not spared as it failed to catch the Hutch deal. The stock fell over 4 per cent.

Sector focus

In the FMCG space, Hindustan Lever managed to stay in the green while United Breweries ended with gains of over 1.5 per cent. Similarly in the IT space, Financial Technologies made a smart rally to end with a gain of 3.7 per cent.

The dream-run in the realty space came to a rude halt with stocks in the space, especially the newly listed ones, receiving a beating. Akruti Nirman, which struggled to preserve the gains made on listing, fell as much as 18 per cent to Rs 453.6. The stock, which was priced at Rs 540 during the initial public offer, closed 16 per cent below its offer price. Parsvnath Developers and Sobha Developers, cheered by the market a few months ago, fell about 10 per cent on Monday.

New listing: Technocraft Industries listed at the BSE and NSE today. The share rose 31 per cent over its offer price of Rs 104 in the BSE before closing at Rs 100.9 - 4 per cent lower than the offer price.

Pioneer Embroideries, TV Today Network and Cambridge Technologies were some of the stocks in the NSE which closed with gains. Lanco Infratech, Entertainment Network and Pochiraju Industries were conspicuous losers.