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Tuesday, Oct 26, 2004

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Pivotals lose as bearish sentiment continues

Aarati Krishnan

CONTINUING their losing streak, the markets were enveloped by bearish sentiment as all the indices slid sharply during Monday's trading.

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The BSE Sensex closed lower by 59.6 points at 5581.5 levels. With the day's decline, the Sensex has lost nearly 100 points over a week. The CNX Nifty lost 22 points to close at 1757. The number of declining stocks overwhelmed advances by a substantial margin on both the bourses. In the Sensex basket, 25 stocks declined, with banking, oil and gas stocks receiving a drubbing, while just 5 stocks rose. Within the Nifty, 41 stocks declined, while just 9 registered gains. Frontline IT stocks held their ground reasonably well during the day's trading, helping the IT index outperform the bellwether indices.

Banks, oil stocks spooked

Though mid-cap stocks as a class, fared worse than large-caps, some index heavyweights came in for focused selling. Numbers for the just concluded September quarter held sway over stock price movements in many cases. Banking stocks were spooked by the sober numbers for the latest quarter unveiled by Corporation Bank and ICICI Bank. Expectations that lower investment income would take a toll on performance dampened the SBI stock, which closed at Rs 439 after shedding Rs 23. It was one of the major losers in the index basket. The sharp drop in IOC's profits for the latest quarter dampened sentiment in other refiners' stocks. HPCL lost Rs 15 to close at Rs 307, while BPCL also lost value. Tata Motors (down by Rs 17.70 at Rs 393) also bore the brunt of fuel price fears.

Some stocks, however, fell despite robust profit numbers unveiled on Monday. Reliance Industries stock closed marginally lower at Rs 536.3 after the company announced a robust 38 per cent jump in net profits for the July-September quarter.

HDFC, which reported a 22 per cent jump in profits for the quarter, also shed Rs 8.90 to close at Rs 654.50. Along with its numbers, the company also announced a new joint venture. It also plans to sell part of its stake in HDFC Securities to HDFC Bank, which may net one-time gains.

L&T, which announced a special dividend of Rs 10 per share, after a fourfold rise in its net profits due to one-time gains, was one of the few exceptions to the bearish trend. The stock put on Rs 10 during the day's trade to close at Rs 830.50.

Infosys (up Rs 41 at Rs 1,819), BHEL (up by Rs 12.2 at Rs 642) and Bharti Tele-ventures (up by Rs 2.10 at Rs 150.80) were also among the few gainers in the index basket.

Mid-cap highlights

Mid-Day Multimedia (up 13.9 per cent to close at Rs 31), Zodiac Clothing (up 6 per cent at Rs 385), Suashish Diamonds (up 8 per cent at Rs 79.60) and Sundram Fasteners (up 5.9 per cent at Rs 113.20) were among the few gainers in the B1 group.

Sundram Fasteners announced a joint venture with Bleistahl Produktions GmbH, a German company, to manufacture valve train parts in India. SKF India gained 6 per cent to close at Rs 122.20, Asahi India Glass - up 2.5 per cent to close at Rs 118.5 and Aventis Pharma was up Rs 18 and finished at Rs 870.2.

Among the major mid-cap losers were Finolex Cables (down by 8.3 per cent at Rs 123), Geometric Software (down by 6.6 per cent at Rs 301), VisualSoft (down by 6 per cent to close at Rs 121) and UTI Bank (down 5.5 per cent at Rs 145). Finolex Cables reported sharply lower profits for the latest quarter, mainly on account of lower "other income".

Mid-Day Multimedia and Sundram Fasteners witnessed surge in trading volumes.

Indiabulls, GV Films, IFCI and Deccan Gold Mines were among the most actively traded counters during the day.

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