The Hindu Business Line : Midcaps fare better amidst fresh declines

Resurrected fears about inflation and interest rates and further policy intervention to cap cement prices brought the tentative recovery in the stock indices to a grinding halt on Friday. The BSE Sensex closed the day with a net decline of 164 points, while the Nifty dropped by 43 points during the trading session. Mid-cap and small-cap stocks fared better than the bellwethers, with the BSE Midcap index shedding 0.35 per cent (compared to the Sensex' 1.3 per cent decline) and the BSE Smallcap Index actually managing to notch up marginal gains for the day.

Market movers

Cement, FMCG and capital goods stocks bore the brunt of selling, while banking and metal stocks held up relatively better amidst the declines. Grasim (down 7 per cent), ACC (6.3 per cent), BHEL (3.68 per cent) and ITC (3.4 per cent), were the stocks, which shed maximum value in the index basket. A Commerce Ministry statement that cement manufacturers had agreed to hold prices static for one year, with its implications for pricing power, dented sentiment towards the entire cement pack. Hero Honda, Tata Steel and NTPC were among the few gainers in the index basket.

Midcap movers

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Among the mid-cap stocks, Global Vectra Helicorp (up 11 per cent), Sunil Hitech Engineers (10 per cent), Bombay Dyeing (10 per cent), Kalpataru Power (6.5 per cent) and Indus Fila (8.4 per cent). Mid-cap cement stocks such as Mysore Cement, Shree Cement and Orient Paper shed significant value. Other notable losers were Cinemax, Inox Leisure, Power Finance Corp and MTNL.

New listings

Defying the recent trend of IPOs listing well below their offer price, Idea Cellular listed at Rs 92.4 levels, with a premium of 23 per cent to its offer price of Rs 75 per share. The stock declined to close at Rs 85.5 for the day, but retained a listing premium of 14 per cent. However, the other new listings struggled, with the Mudra Lifestyle stock closing at Rs 64 (29 per cent below offer price) and Euro Ceramics closing at Rs 119 (28 per cent below offer price).

Stock-specific action

* The stock of M&M declined 4.4 per cent; the company announced a winning bid to acquire a 43.3 per cent stake in Punjab Tractors at a price of Rs 360 per share. The Punjab Tractors stock closed flat for the day, while Swaraj Engines gained 10 per cent.

* The Bajaj Auto stock shed some value; the company today confirmed that it was examining the de-merger of its investment arm into a separate entity over the next 6-9 months.

* NTPC gained about 3 per cent; the company notified the exchanges about the commissioning of a new 500MW unit at Madhya Pradesh.

Pointers to the next sessions

Global sugar prices softened during the day, after Brazil revised its output estimates upwards.

FIIs made net purchases in stocks on March 8 and 9, after remaining net sellers in the preceding sessions.

Vehicle sales numbers for the month of February showed a 46 per cent increase in passenger car sales and a 26 per cent increase in commercial vehicle sales; but two wheeler sales grew at a sedate 6 per cent, year on year.

EID Parry, Tanla Solutions, ITD Cementation, Tube Investments and Punjab Tractors were among stocks that recorded a significant spurt in trading volumes for the day.

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