The Hindu Business Line : Profit booking checks Sensex progress

Tuesday's trading session was market by profit booking after the Sensitive Index closed above the 13,000-mark on Monday. Positive cues from major global indices failed to enthuse the markets after the Reserve Bank of India's guarded statements in its mid-term review of the annual monetary policy for 2006-07. While select index heavy weights helped pare some of the early losses, the overall market breadth was negative with the declining stocks outnumbering the advances by a ratio of 2.2:1.

Earlier in the day, the RBI raised its overnight lending rate or the repo rate by 25 basis points to 7.25 per cent to curb excess borrowings and keep inflation at bay. The bank rate or RBI's borrowing rate remained unchanged at 6 per cent. While the Central Bank reinforced the strong economic growth through deductions from the industrial production and growing demand for credit for investment and consumption purposes, it expressed concerns over the quality of credit disbursals and economic developments in the global scenario.

Buzzing stocks

Sical Logistics, Godrej Industries and Anant Raj Industries were some of the BSE 500 stocks that refused to be bogged down by weak market sentiments and hit their upper circuit limits and remained at that level. Reliance Natural Resources, Jaiprakash Associates, Ashok Leyland, Steel Authority of India and IDFC were stocks that witnessed high volumes at the NSE. The stock of Cummins India surged over 7 per cent after it announced a 66 per cent jump in its net profits for the second quarter. The share witnessed volume of over 35 lakhs.

Sector focus

BSE FMCG was the only sector index to close in the green on the back of encouraging results from companies in the space. Colgate Palmolive and Hindustan Lever rose smartly while Godrej Consumer Products declined on selling pressure.

Dabur India rose 1.5 per cent after it announced a 32 per cent increase in profits and a bonus offer in the ratio of one share for every two held.

The strong rally of banking majors came to halt on Tuesday with heavyweights such as HDFC Bank, ICICI Bank and Punjab National Bank closing weak. Mid-cap stocks such as Bank of India, Indian Overseas Bank, UTI Bank and Andhra Bank, however managed to move northward.

Stock-specific action

Deccan Aviation soared high with gains of about 11 per cent. Over 40 lakh shares of the company were traded at the NSE.

The company plans to raise $6 million (Rs 27 crore) by selling shares to Investec at Rs 150 each. The sale price is at a 49 per cent premium to the stock's closing price on Monday.

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Unity Infraprojects rose 2 per cent to Rs 552. The company has won orders worth Rs 85 crore to construct buildings in Karnataka and Maharashtra.

Post market session, Tata Consultancy Services announced the buying of its Swiss partner's stake in an outsourcing services company for $80 million (Rs 360 crore) to expand presence in Europe in the banking and finance division.

Bajaj Auto Finance, Inox Leisure, Jaypee Hotels, Indo Tech Transformers and Bartronics were prominent gainers at the NSE.

Madhucon Projects, Arvind Mills, Balrampur Chini Mills, Bajaj Hindusthan and Sadbhav Engineering were conspicuous losers.