The Hindu Business Line : Bottom fishing, renewed buying help indices recover

Notwithstanding the positive cues from both the Asian and US markets, Indian markets buckled under selling pressure on concerns of rising inflation and liquidity crunch during early trades. The Sensex shed close to 205 points, but thanks to bottom-fishing and renewed buying, it recovered most of its loss and closed with 81 points loss. The Nifty, however, closed on a flat note. Despite the recovery, the investors' sentiments remained weak, with an advance-decline ratio of 1:1.6. However, the market breadth for the Sensex pack remained neutral. The hike in Cash Reserve Ratio by the Reserve Bank of India on Tuesday could be attributed to the selling across sectors such as banking, auto and home finance companies.

New listing

Multi-screen operator Cinemax India had its debut listing on BSE at a premium of about 13 per cent against its issue price of Rs 155. The stock, however, closed below its issue price.

Buzzing stocks

Punjab Tractors registered a gain of about 7 per cent on expectations of an aggressive bidding process for its stake sale. Among other stocks that witnessed buying interest were Escorts, Rolta India, Praj Industries, Kopran and Sundaram Fasteners.

Among stocks that hit their all-time low during the day were LT Overseas, Parsvnath, Nissan Copper and Andhra Sugar.

Sector focus

Banking stocks declined following the CRR hike by the central bank for the second time in two months. The BSE Bankex closed with a loss of about 4 per cent. Leading the fall was Oriental Bank, which lost 7 per cent. State Bank of India, the country's largest bank fell by about 6 per cent. ICICI Bank lost 39 points to close at Rs 915. Among other stocks that closed in the negative turf were HDFC Bank, Canara Bank, Bank of India and PNB. Bucking this trend, Centurion Bank of Punjab and Kotak Mahindra Bank closed in the green.

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Concerns regarding the likely hike of interest rates on both auto and home loans weighed on stocks in this space. Maruti Udyog shed close to 3.7 per cent; M&M lost 1.8 per cent; Tata Motors shed 1.7 per cent. Among the housing finance stocks, HDFC lost 2.3 per cent and LIC Housing Finance lost about 2 per cent. Property stocks dipped on concerns of a possible rise in mortgage rates. Unitech, continuing its losing streak, shed 10 per cent. Ansal Properties & Infrastructure shed 5 per cent.

Metals staged a comeback on the back of a 5 per cent rise in copper prices in the LME on expectations of a rise in demand for raw materials in China. Sterlite Industries gained by about 4 per cent. Among other stocks that chipped in gains were National Aluminium, Hindalco, Jindal Stainless and Tata Steel. Sesa Goa clocked gains on rumours that Rio Tinto was leading in the race to buy Mitsui's 51 per cent stake in the company.

Stock-specific action

Lanco Infratech gained 3.2 per cent on news that its Mauritius-based holding company and Jindal Steel and Power have acquired power generation firm Globeleq of Singapore.

Gitanjali Gems registered 1.8 per cent gain on news that it has bought a majority stake in diamond firm Tri-Star Worldwide LLC.