The Hindu Business Line : Flat end to a volatile day

THE uncertainty of the election results appears to be weighing heavy on the minds of investors. A range-bound trading session followed the steepest fall in three years. The markets remained volatile throughout the day.

Select stocks registered gains on the back of better financial performance. The recently-listed stocks such as Dishman Pharma, Biocon and Power Trading Corporation still continue to attract interest.

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The all-round rally in sugar stocks is now limited to a couple of stocks such as Upper Ganges and Dhampur. Upper Ganges Sugar has been on a relentless rally over the past couple of months.

The lower cane production is supposed to boost sugar prices. The sugar companies are also expected to benefit from alternative businesses such as co-generation and ethanol. Most sugar companies such as Balrampur Chini, Bannari Amman, Oudh Sugar, Upper Ganges and Sakthi Sugar gained further.

Another industry that has been attracting substantial interest is gem & jewellery. Stocks such as Shrenuj Diamonds and Suraj Diamonds gained substantially. Traded volumes too were higher. The exports of gem & jewellery have been growing at a fast pace and diamond polishers are now upgrading into the jewellery segment where margins are higher.

Outsourcing opportunities too appear to be fuelling interest in jewellery stocks.

Banking stocks made a comeback after they were beaten heavily in Tuesdays' crash. The BSE Bankex gained 1.25 per cent even as most other sector indices trailed behind. The PSU bank stocks such as IOB, Vijaya Bank, Bank of India, Bank of Baroda and State Bank gained. Among the top gainers for the day were KPIT Infosystems, Dhampur Sugar, Mukand, Aftek Infosys and Crompton Greaves.

Compton Greaves has been in the limelight for the past few days. The stock gained 8.6 per cent during the day and traded at Rs 189. The interest could be in expectation of good results for the year 2003-04. The company has high debt levels in its balance sheets. As cash flows improve, it would be able to repay debt and further improve profitability.

The other Thapar group companies such as Greaves Cotton and Greaves Morganite too were upbeat.

The stock of Natural Capsules rose 19 per cent during the day. The stock trades at four times its trailing 12 month per share earnings. The company reported an 180-per cent jump in earnings in the year ending March 2003. The growth momentum continued in the year 2003-04 too. Traded volumes jumped 10 times on Wednesday.

Pantaloon Retail, another stock that has been on the gainers list for some days continued to remain firm. The buoyancy in the retail segment appears to be fuelling the stock.

The PSL stock gained 3.3 per cent to Rs 102.75. PSL, a steel pipe manufacturer, has bagged an order worth Rs 900 crore from a Sudan-based Oil and Gas company.

Subros was another stock that remained firm. The company had announced a bonus issue couple of days ago.

A few other stocks such as Info-Gulf Fertilisers, Blue Dart, Jubiliant Organosys and Grasim gained on the back of better financial performance. Other gainers include Numeric Power Systems, Lakshmi Mills, Gujarat State Fertilisers, Jyoti Ltd, Bihar Sponge, Alpha Drugs, Panacea Biotech Kakatiya Cements, Mangalam Cements and IFGL Refractories.

Regency Ceramics dipped steeply on reports that the company's profitability may be affected due to GAIL's decision to reduce natural gas supplies to the company's manufacturing plant. The company indicated that profit margins may reduce to 7 per cent from 10 per cent due to the 30 per cent rise in cost of production if an alternative fuel is used.

A few major losers were Kalyani Brakes, FCL Technologies, Aventis Pharma and NRB Bearings.