The Hindu Business Line : Reliance, L&T forge ahead in dull market

IT was a day of lacklustre market activity. The sharp recovery witnessed on Tuesday turned out to be short-lived, with the key indices closing in negative territory on Wednesday. The BSE Sensex dropped 6.91 points to close at 6582.5. The S&P CNX Nifty was down 1.3 points at 2057.1.

With the Budget round the corner, market participants appear to be treading the path of caution. This is reflected in the relatively narrow range that the indices were confined to during the day. The BSE Sensex oscillated in a band of 42 points during Wednesday's trading.

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Though the total business volume at the BSE improved to Rs 2,174 crore from Rs 1,857 crore in the previous day, much of the activity appears to be have been outside of the frontline large-cap stocks.

The weak trend in stocks such as Infosys Technologies, Satyam Computer and Hindustan Lever played a role in imparting weakness in the Sensex. The share price of Infosys dropped by Rs 19.9 to Rs 2,148.95 and Satyam by Rs 9.75 to Rs 394.8.

The sharp drop in the value of the dollar appears to have triggered the fall in technology sector stocks. With huge dollar-denominated earnings, a drop in the value of dollar tends would affect profitability of software companies.

Reliance Industries, Larsen & Toubro and Hindalco Industries were the handful of gainers from the stocks that form part of the Sensex. The share price of Reliance Industries increased by Rs 8.4 to Rs 548.05 and Hindalco by Rs 18.7 to Rs 1,376.7.

In an otherwise dull trading environment, a sharp pick-up in trading volume was evident in stocks such as JCT, Agro Dutch Industries, SKF India and Rane Madras. The spurt in volume was accompanied by a rise in share price as well. In the case of JCT, the share price moved up by 15 per cent to Rs 12.43. Trading volume zipped to 1.65 crore from 18 lakh shares recorded the previous day.

Along with JCT, S. Kumars Nationwide was another small-cap textile stock that attracted heightened market activity. The share price moved up by 8 per cent to Rs 24.4 while trading volume rose to 2.55 lakh shares from 1.09 lakh shares on Tuesday.

After a spell of downward trend, the share price of Visaka Industries too a u-turn on Wednesday. The stock ended the day at Rs 137.65, up 6.4 per cent over the previous day's close. Trading volumes increased to 91,929 shares from 85,997 shares. Reports that the company is expanding its capacity in asbestos and textile division appears to have triggered positive sentiment towards the stock.

The share price of Bank of Punjab recorded a 14.1 per cent jump to close at Rs 44.4. Trading volume spurted to 1.52 crore shares from 15.5 lakh shares recorded on Tuesday. The company has decided to offer a 4.99 per cent stake each to Bank of Nova Scotia, Canada, and a company forming part of the Bharati group.

The share price of liquor majors United Breweries and McDowell recorded sharp gains on Wednesday. A consortium of companies including these two has made an open offer to acquire a 25 per cent stake in Shaw Wallace. The share price of United Breweries rose 5 per cent to Rs 99.75 and McDowell by 10 per cent to Rs 172.55. A sharp spurt in trading volume was evident in both the counters.

Stocks such as Jain Studios, Divi's Labs, ING Vysya and Tourism Finance Corporation were prominent amongst the losers of Wednesday's trading. The drop in share price of these companies was, however, on the back of a lower trading volume. In the case of Jain Studios, the share price dropped 4 per cent to Rs 388 while trading volume declined to 1.57 lakh shares from 8.6 lakh shares the previous day.

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