Radhika Kamath

BEARISH sentiment continued to plague the markets as they started the week on a negative note. Profit booking by investors kept the sentiment subdued as markets extended their losses for the third session.

While the benchmark Sensex was down by 30.2 points, the 50-stock Nifty lost 15.6 points.

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On Monday, the markets opened on a firm note. The Sensex opened 34.2 points higher than its previous close, while the broader Nifty opened on a flat note. However, the markets failed to hold on to these levels as profit booking by investors wiped off the early gains. While the Sensex closed at 7750.6,the Nifty settled at 2367.8.

It was a day marked by a high level of volatility, where across-the-board selling resulted in most sectoral indices ending in the red.

Banks were the worst hit, which was reflected in the BSE BANKEX, which declined by over 1 per cent.

The undertone in the markets was largely bearish. Seventeen out of the 30 stocks constituting the BSE 30 shed value.

The negative sentiment was more pronounced among the large-cap stocks. Significant losers were Wipro, Tata Motors, HDFC, Tata Steel, Reliance, SBI, ACC, ONGC, ICICI Bank, Bajaj Auto, TCS, HLL, Maruti, L&T and Hindalco.

A wave of pessimism circled most IT stocks. Patni Computers, Rolta India, i-flex Solutions, Geometric Software, Ramco, Polaris, KPIT Cummins and Flextronics came in for selling pressure. A host of them who managed to negate the trend included HCL Infosystems, iGate Global, Infosys and Datamatics Technologies. Scandent Solutions was a significant gainer whose stock shot up by 10.2 per cent to close at Rs 277.8.

Most stocks in the metals space also witnessed lacklustre trading. Stocks of Jindal Saw, Essar Steel, Ispat, Maharashtra Seamless, GMDC and Jindal Stainless remained subdued. However, selective buying interest in Vesuvius, Hindustan Zinc and Navabharat Ferro Alloys kept them in positive territory.

Bears were very active across the counters of most FMCG stocks. Britannia, Crew BOS, Tata Tea, Henkel Spic and Gillette ended in the red.

The few who could lure the investors included Jindal Photo, CCL Products, Colgate, Radico Khaitan, ITC, Ruchi Soya and Satnam Overseas.

Stocks in the auto and auto ancillaries sector failed to gather momentum. Tata Motors, Shanthi Gears, Amtek Auto, TVS Motor, Eicher Motors, Exide Industries and Bharat Forge put up a poor show. Fresh buying in MRF, Hero Honda, Munjal Auto and Hindustan Motors helped the stocks put up modest gains.

It was a disappointing day for the pharmaceutical stocks, which suffered huge doses of losses. Those that lead the pack were Merck, Divi's Lab, Abbott India, Matrix Lab, Pfizer, Aventis Pharma and Shasun Chemicals. The few stocks that recorded respectable gains were Dabur Pharma, Cipla, Morepen, Ranbaxy and Dishman Pharma.

Banking sector stocks bore the brunt of the onslaught by bears. Barring a select few stocks such as HDFC Bank and Bank of Baroda, most of them suffered sharp losses.

Stocks in the oil and energy sector failed to flare up the market sentiment. IOC, GAIL, MRPL, Hindustan Oil Exploration and Kochi Refineries stayed weak. ONGC was down by 1.1 per cent after rival China National Petroleum Corporation agreed to buy Petrokazakhstan topping its bid.

Stock-specific action: India Foils jumped by 18.8 per cent. This may be seen on the back of news reports that Alcoa and Hindalco may bid for the 45-per cent stake of Vedanta Resources in the company.

Punjab Alkalies and Chemicals shot up by 20 per cent on news reports that Grasim, Sterlite and four other companies intend to purchase the Punjab Government's stake in the company.

Dr Reddy's gained marginally (up by 0.6 per cent) after it received a tentative approval from the USFDA to sell its copy of the diabetes drug, Amaryl, in the US.

(This article was published in the Business Line print edition dated August 23, 2005)
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