The Hindu Business Line : Auto, IT, media stocks drive down indices

SEBI's announcement ruling out the banning of FIIs from issuing participatory notes appeared to have pulled the markets northward towards latter part of the trade.

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However, a majority of the indices closed in the red. The mid-cap and small-cap indices on the BSE recorded marginal gains of about 0.30 per cent.

Opening on a weak note, the BSE Sensex took a deep dive, almost immediately it touched the day's low of 6,380.53. However, the index recovered a portion of its losses to close marginally lower by 19 points at 6,447.

The S&P CNX Nifty within minutes of opening plunged to as low as 1,964 points. In the latter hours of morning trade, it recovered a portion of its losses, only to lose them again in the afternoon session. In the last hour of trade it recouped some of the losses to close 8 points lower than the day's high of 1,990.95.

Auto, IT and media stocks pulled the markets to lower levels. Banking and frontline auto stocks were highly active — they registered sharp jump in volumes.

Intense trading activity was recorded on the counter of Bank of Rajasthan after the announcement of its proposal to raise Rs 1,000 crore. About 10 lakh shares changed hands on the BSE, the stock closed with a sharp gain of 5.5 per cent. State Bank of India and Punjab National Bank also registered gains, accompanied by a three-fold jump in volumes. SBI closed at Rs 642.25. Buying interest in Bank of Maharashtra pushed the stock up by about seven per cent, after it declared a 14-per cent dividend.

Other major gainers in the banking sector were Allahabad Bank, Oriental Bank of Commerce, Centurion Bank, Federal Bank and IndusInd Bank.

A mixed trend prevailed in the steel stocks, amidst lower Asian prices for steel. Reports of Tata Steel's reluctance to cut down prices of steel appeared to have helped the pivotals — Tata Steel, SAIL and Essar Steel to close with gains. The losers in the sector were Ispat Industries, Jindal Steel, Man Industries, Uttam Galva and Bhushan Steel.Led by Hindalco other non-ferrous metal stocks shed value. Prominent among the losers were Sterlite, National Aluminium and Madras Aluminium.

Auto stocks took a beating as a large number of stocks closed in the red. Eicher Motors led the downfall; the stock registered a drop of about 4 per cent. Other stocks that booked sharp declines were Escorts, Punjab Tractors, Tata Motors, TVS Motor and Ashok Leyland.

GAIL gained about three per cent after reports that it had won appeals against a demand of Rs 4,962 crore as taxes by the Gujarat Government. Gujarat Flourochemicals gained more than 84 per cent since a month ago. Other prominent gainers in the oil & gas sector were BOC, IBP and BPCL.

Smart trading activity was recorded on the counter of SpiceJet (formerly Royal Airways). The stock gained about 10 per cent. Announcement of fares as low as Rs 99, to take on Air Deccan, appears to have been the driver for the surge. The stock gained about 51 per cent since April 18.

After opening on a strong footing, Jet Airways lost considerable value in the early hours of trade to touch a low of Rs 1,260. The stock recovered thereafter to close with a drop of 1.06 per cent.

Prominent among the gainers in the Nifty constituents were Tata Power, ABB, Hero Honda and Reliance. Significant losers among the Nifty constituents were BHEL, Bharti Tele-Ventures, Gujarat Ambuja Cements, HCL Technologies and ICICI Bank.

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