The Hindu Business Line : Yet another volatile trading day

Markets underwent yet another volatile trading session on Wednesday. BSE Sensex swung 500 points intra-day while Nifty moved between bands of 70 points.

Tuesday's pullback continued at the opening session but selling stepped in at higher levels and dragged the Sensex to intra-day low of 12,390.

The battered markets had more bad news by way of a statement from the Commerce Minister indicating that the Government might consider a ban on cement exports.

Cement stocks underwent heavy selling pressure, pulling down the market with them. A clarification from the Minister that the excise duty would not be passed on to the customers, and that the Government may not move to curtail exports to tame inflationhad a positive impact.

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Cement stocks recovered some lost ground and aided the recovery of the market. Last hour of trading saw some active buying and the Sensex managed to close at 12,579.75 by shedding 117.34 points.

Mid and small-cap stocks bore the brunt of the markets and shed 2 per cent and 2.7 per cent respectively.

The Nifty closed at 3,626.85 by losing 29 points. The declining stocks outnumbered the advances at 3.8:1.

Cipla, Reliance Communication, Dr Reddy's, Tata Motors, Larsen & Toubro and M&M all closed in green and played a positive role in the market's recoveryin the final hour.

New Listing

MindTree Consulting, which recently came out with an IPO at Rs 425, had a stellar performance as the stock closed the day at Rs 620.3.

On the other hand, stocks such as Broadcast Initiatives, Evinix Accessories and Oriental Trimex all closed considerably discounted to the offer price.

Sector Focus

Metal, banking, FMCG and IT were the worst affected on a volatile trading session. Banking stocks almost surrendered the gains made on Tuesday's trading with Bank of Baroda losing 5.6 per cent to Rs 190.20. Following suit were Bank of India, Union Bank of India and the leading private players ICICI Bank and HDFC Bank. Bucking the trend to close in green were Oriental Bank of Commerce and Federal Bank.

Metal stocks once again topped the list of losers. On the back of pressure from the Government the steel-makers that announced a cut in prices faced the wrath of the market participant. Jindal Steel lost Rs 22.45 to Rs 2,060. Sesa Goa, Maharashtra Seamless, Sail and Sterlite Industries all shed 4-5 per cent. The lone stock to buck the trend was Jindal Saw.

FMCG continued the losing streak; BSE FMCG index shed 2 per cent. Bata India was the worst suffer and it shed 5.9 per cent. United Spirits, Britannia, Colgate Palmolive, HLL and ITC all closed in the red. United Breweries was the exception and added values to the previous close.

IT stocks came under selling pressure. Wipro shed 4 per cent to close at Rs 556.5. Financial Technologies, Patni Computers, Satyam Computer and Infosys Technologies also lost ground. Tech Mahindra was the lone stock to end in green in this pack.

Stock Specific Action

Uttam Galva Steels announced that it would build a Rs 270-crore ($60 million) plant in Ghana with Britain's Liberty Commodities to make metal for the auto and construction industries. The stock gained 1.38 per cent to Rs 29.3.