The Hindu Business Line : Heavy selling pressure drags Sensex down

The markets ended in the negative territory for the third consecutive day. The bearish sentiment prevailed right from the opening, except for a brief period in the forenoon session. As the day progressed, heavy selling pressure dragged the market down. The Sensex lost 327 points (or 3.15 per cent) to close at 10,071.42 points, while Nifty shed 108 points (or 3.54 per cent) to settle at 2,962.25. Among sectoral indices, engineering, auto, metal and software were the worst hit. The market breadth remained negative, with one stock advancing in value as against five shares logging declines.

Sector Focus

All sectoral indices closed in red. Metals lost its sheen with aluminium, zinc and copper dropping at the London Metal Exchange. In this backdrop, metals stocks witnessed heavy selling pressure. Hindalco dipped by seven per cent, Sterlite Industries by five per cent and Madras Aluminium also by five per cent. Despite the price hike announced by steel major, Tata Steel, the stock declined by six per cent. Other steel stocks also suffered declines, with Essar Steel and Steel Authority of India shedding between six to seven per cent.

Click here for table

The software stocks, which had firmed up on Wednesday's trade on the back of a depreciating rupee, reversed course during the day. Practically, all the stocks from this sector ended in the red. Satyam lost five per cent, Patni Computers, Infosys, Wipro, i-flex Solutions, and CMC also retreated by 4-6 per cent. The only stock that bucked the trend was MphasiS BFL, which closed marginally higher.

Stocks from the auto space were also hammered down heavily. The top loser in this category was two-wheeler major Hero Honda followed by Maruti, Bajaj Auto, Tata Motors and TVS Motors. Most of these stocks closed 6-7 per cent lower.

In the engineering sector, L&T, which recently won an order for Rs 3,000 crore jointly with Toyo Engineering Corp. also ended in the red. The worst hit in the sector was Suzlon Energy, which lost 8.6 per cent to close at Rs 892. Other stocks such as Siemens, Thermax, BEL and ABB plummeted by four to six per cent. The only stock that went against the market trend was BHEL recording a marginal gain.

Stock Specific action

* The Wockhardt stock appreciated by Rs 10 to close at Rs 370. The uptrend has to be seen in the backdrop of the company receiving approval from the United States Food & Drug Administration (US FDA) for marketing Clarithromycin tablets in that market

* Despite announcing a strong performance for the quarter and year ended March 31, 2006, Sterlite Industries ended in the red. In the fourth quarter, the company has recorded post tax earnings of Rs 240.7 crore as compared to a net loss in the corresponding period of the previous year.

Prominent Gainers

In a turbulent market, the stocks that gained during the day were TNPL, Adani Exports, Balaji Telefilms, Aarti Drugs, Cosmo Films, Rane Engine, Suven Life and Flex Industries.