The Hindu Business Line : Profit booking ahead of results drags indices down

IT was a day marked by heightened bearish activity with the markets ending with a significant slide. Profit booking by investors ahead of results announcements by index heavyweights dragged the indices into the red.

The benchmark Sensex shed 138.2 points, its biggest decline since December 26. On the NSE, the 50-stock Nifty was down 39.3 points.

After a subdued session on Monday, the markets opened on a flat note. Intense selling pressure, particularly across the frontline counters, pulled the indices into the negative territory.

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The Sensex lost about 150 points during intra-day trade and closed at 9,445.3, while the Nifty finished at 2,870.8.

Ahead of earnings announcement by Reliance and Infosys, the stocks exhibited weakness. Both were down by about 1.8 per cent on an average.

The breadth of the market was largely negative; declining stocks outnumbered the advancing ones by about a factor of two. However, a few mid-cap and small-cap counters were buzzing with activity on the back of strong buying support.

Madhucon Projects, Sundaram Clayton, Unitech, JK Cement, Yes Bank, Sintex Industries, TVS Electronics, and Solvay Pharma witnessed significant buying action.

There was widespread activity across the counters of stocks that recently hit the market.

Stocks of Everest Kanto, Punj Lloyd, PBA Infrastructure, Kernex Microsystems, AIA Engineering, Shree Renuka Sugars and Tulip IT Services witnessed significant spurt in volumes.

With a volume of over 32 lakh, Everest Kanto added 17.4 per cent at close. The Shree Renuka Sugars stock appears to have caught investors' fancy in the last few sessions. With a volume close to 9.3 lakh, the stock recorded a gain of 10 per cent. About 17.4 lakh shares were traded across the counters of Kernex Microsystems, whose stock flared up 4.1 per cent.

IT sector stocks sported a bearish outlook. Ahead of Infosys's third quarter results, which are likely to come out on Wednesday, investors appeared to remain cautious.

Satyam, TCS, Sonata Software, Polaris Lab, Cranes Software and Four Soft also remained subdued. Hexaware, i-flex and Allsec Technologies were among the few that managed to reverse the trend.

Banking sector stocks also witnessed lacklustre trading. HDFC Bank, which recorded 31 per cent growth in third quarter profits, failed to cheer the market. The stock closed 1.2 per cent lower.

Bank of Baroda, Andhra Bank, UTI Bank, SBI, Punjab National Bank, ICICI Bank and Union Bank also ended in the red, among others.

There was selective buying among stocks in the pharmaceutical space. The announcement by Ranbaxy that it had signed an agreement with Ferring International to market the Swiss company's urology drug in India may have bolstered the market interest in the stock. It added 4.1 per cent to close at Rs 393.8.

Even after denial of any acquisition talks by the management, the stock of Aurobindo Pharma continued to attract the bulls. The stock gained 13.1 per cent on the back of huge volumes. Dabur Pharma, Glenmark Pharma and Cadila Healthcare ended with marginal gains.

Metals stocks failed to add sheen to the market, as most of them ended with losses. Sterlite Industries, Bhushan Steel, Sesa Goa, Uttam Galva, Tata Steel, Jindal Stainless and Mahindra Ugine came in for sharp selling pressure.

Most stocks in the FMCG space also ended on a disappointing note. McDowell, HLL, ITC, Ruchi Soya, Satnam Overseas and Colgate Palmolive shed value, while Dabur India, Marico, GTC Industries, Britannia and Tata Coffee managed to end in positive territory.

Amid concern of rising crude prices, a good number of refinery stocks slipped into the red. IOC, HPCL, BPCL and Essar Oil, among others, suffered losses.

Other notable losers on the NSE were Apollo Tyres, Arvind Mills, Alok Industries, Berger Paints, Bajaj Auto Finance and Bombay Dyeing.