The Hindu Business Line : Mid-cap stocks suffer under selling pressure

The BSE sensitive index ended the day with a loss of about 150 points, despite a firm opening in the morning. Concerns regarding Bank of Japan's policy meeting and an expected hike in short-term capital gains tax by the Government in the upcoming Budget could be attributed to the broad-based selling during the day.

Overall sentiment, ahead of the Budget appeared to be that of caution and prudence, as speculators and traders seemed to square-off positions ahead of the current month derivative contract expiry on Thursday.

While banking, cement, auto and PSU stocks were among the top losers during the day, small-cap and mid-cap stocks also slipped under selling pressure as investors sought to book profits in them.

Mirroring similar sentiments, the market breadth too, was skewed in favour of the bears, with about three stocks declining for every advancing one. However, value buying at lower levels brought some respite to the otherwise weak market.

Buzzing stocks

Biocon surged by 8.3 per cent after its licensing partner Bentley Pharmaceuticals Inc received approval from the Drug Controller General of India (DCGI) to proceed with phase-II clinical evaluation of Nasulin in Type-II diabetic patients. Hindustan Petroleum, appreciated by about 2 per cent on reports that the Lakshmi Mittal Group will pick up 49 per cent stake in the HPCL's Bhatinda refinery. The other stock, which hogged investors' attention during the day, was Hindustan Lever. The stock fell by about 2.7 per cent on the announcement of its December quarter results. The company reported a 10.27 per cent increase in earnings during the quarter against the corresponding period last year.

Sector focus

Market breadth for the Sensex pack also remained weak, with only five stocks closing in the green. Leading the loser's was index heavyweight, ONGC, which slid by about 3.24 per cent on reports that the oil regulator has rejected ONGC's claim of discovering natural gas off India's eastern coast. Among other stocks that closed in the red were Reliance Energy, HDFC, Reliance Communication and Wipro.

Cement stock lost ground on concerns that the Government might impose a ban on the cement exports in the budget to check the prices. Grasim Industries shed 3 per cent; Gujarat Ambuja lost 1.8 per cent, while Shree Cements lost 2.8 per cent. Some of the other stocks that lost during the day were Mysore Cements, Madras Cements and India Cements.

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The BSE Bankex lost about 1.4 per cent on concerns regarding rising interest rate. The stock price of State Bank of India saw a fall of about 2.2 per cent after the bank announced a rise in its prime lending rates by 75 basis points. Among other bank stocks that moved southward were Indian Overseas Bank, Kotak Mahindra Bank, UTI Bank and Centurion Bank of Punjab.

Stock-specific action

IFCI notched up gains of about 4.3 per cent on speculative reports that foreign bank is looking to buy majority stake in the company.

Reliance Petroleum chipped in gains of about 2.6 per cent on news that oil major Chevron Corporation would raise its stake in the company from the present 5 per cent.

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