The Hindu Business Line : Weak dollar turns tech stocks weaker

THE indices remained in the positive for the best part of the day, thanks to the gains of old economy and defence stocks. The BSE Sensex gained about 1.27 per cent at 5,590.60. The broadbased index Nifty stood firm, went up 1.24 per cent to 1,771.90. Index constituents such as Reliance, HLL and SBI helped the index to remain in the positive. Notable among the losers were Infosys, ICICI Bank and ITC.

The tech stocks languished in the negative with worries about the earnings getting impacted due to the appreciation in the rupee. Also fuelling the negative feeling was reports that the ruling party, BJP, favours "steadily strengthening" rupee and that the central bank may allow the rupee to rise. The rupee pierced through the 44-level psychological barrier and spurted to a 53-month peak of Rs 43.35/39 against the dollar on Wednesday, driven up sharply by sustained heavy trade and foreign capital investment inflows ahead of the fiscal year-end. Stocks that gained were CMC, Digital GlobalSoft, HCL Infosys, Ramco Systems, i-flex Solutions and VisualSoft Technologies.

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ICICI Bank declined by Rs 1.40 to Rs 295.90. About 2.9 lakh shares were traded on the BSE.

However, the sentiment was positive among other banking stocks with the exception of Punjab National Bank, Indian Overseas Bank, Bank of Rajasthan and Global Trust Bank.

Punjab National Bank declined by about 5 per cent to Rs 333.30.

Notable gainers were Syndicate Bank, SBI, Canara Bank, J&K Bank and Kotak Mahindra Bank.

The BSE bank index has gained more than 12 per cent in six trading sessions. UTI Bank ended the day higher at Rs 146.75, up by Rs 4.8. A block deal of more than 89 lakh shares in early trades in the BSE boosted sentiment towards this stock. Federal Bank hit a new 52-week high of Rs 377.50. J&K Bank gained Rs 20.65 to Rs 495.10 on its announcement that the Reserve Bank of India has given it permission for declaration of interim dividend.

The breadth of the market was positive on Wednesday with 1,163 stocks gaining as against 689 stocks that closed with losses. The action was largely in the `A' segment of shares. About 67 per cent of the 199 stocks of this category appreciated.

IDBI declined by more than a per cent to Rs 58 on reports that it may show loss if the Government fails to resolve stalled the Dabhol power project within 6 months. IDBI has lent Rs 2,444 crore to Dabhol project, which is yet to take off. Colgate Palmolive gained 3.22 per cent to Rs 131.50 following the company's dividend declaration of 12.5 per cent per share.

Major gainers during the day were Kesoram Industries, Eicher Motors, Sintex, Videocon Industries, NRB Bearings, Kalyani Brakes and Esab India.

Kesoram Industries, a diversified player with interest in cement, gained 17.18 per cent to close at Rs 60. Couple of mid-size cement players such as India Cements, Madras Cements and Mysore Cements closed the day in the negative.

Prominent among the losers were Birla Global finance, Rane Engine Valves, Pritish Nandy Communications, IVRCL Infrastructure, Thomas cook (India) and HCL Technologies.

Most of the oil stocks remained in the positive. ONGC closed the day with marginal gains at Rs 840.45. The stock broke its two-day losing streak on news that the over allocation of shares in the recently closed public issue would be corrected by Wednesday.

In the F&O segment of the NSE, the most active contracts were the April contracts of Nifty, Satyam Computers, Reliance and Tata Steel.