Financial Daily from THE HINDU group of publications
Friday, Aug 13, 2004
Markets - Commentary
Columns - Sensor
Indices tumble further on inflation worries
THE markets continue to fall, as the burgeoning inflation has left investors with an unsettled feeling. The BSE Sensex, which fell 77 points on Wednesday, extended its losses by a further 35 points, to close the trading session at 5139 points.
The Nifty declined by 15 points to close at 1607.20, down from its previous close of 1621.60 points.
The fact that industrial production in June rose 7.3 per cent over the previous year did not succeed in boosting investor sentiment.
The Sensex opened on a weak note at 5167.52 points and then proceeded to record a high of 5194 points. It subsequently declined and fell into the negative territory where it traded in a narrow range.
Only seven stocks of the 30-strong Sensex advanced, reflecting the bearish sentiment. A reasonable level of buying activity in the last few minutes saw the benchmark index recover some of its losses, but not enough to propel it into the positive territory. In the last week, the index has declined by about 2 per cent; most of the decline was witnessed on Wednesday and Thursday.
Index gainers and losers: Of the Sensex, the stocks of Tata Motors, Hindalco, HPCL, Wipro and Dr Reddys led declines. The stock of ONGC declined by more than one per cent. A differential pricing policy has been mooted for the company for natural gas, with the power and fertiliser sector set to enjoy lower rates.
The stock of Dr Reddy's continues to be on the losing list, declining by Rs 15 or about 2 per cent to close at Rs 762. Many brokerage firms have downgraded the stock over the last month. Its launch of a product for the skincare segment failed to perk up interest in the stock.
Prominent gainers for the day included HDFC, ACC and Bharti Tele-Ventures. Other stocks that gained include Cipla, MTNL and BHEL.
The stock of BHEL was up 0.50 pc at Rs 562.60. The gain comes on the back of its bagging a Rs 2- crore export order from UK's Tyco Electronics. The order is to supply 14,280 disc insulators for use on UK's National Grid.
On the Nifty, the stocks of Sun Pharma and Dabur declined sharply.
IT stocks out of favour: IT stocks bore the brunt of the bearish investor sentiment. Reflecting this was the decline in the CNX-IT index. The index shed 1.25 per cent. Mid-caps stocks such as MphasiS BFL, NIIT and Patni Computers fell sharply.
Frontline stocks such as Infosys and Satyam fell, but to a lesser extent.
Bucking the declining trend were the stocks of Hughes Software and iGATE Solutions. The stock of iGATE gained more than 6 per cent to close at about Rs 240.
Pharma stocks look up: Mid-cap pharma stocks continue to attract buyer's attention, even as large-caps Dr Reddys and Sun Pharma lost heavily. The stocks of Natco Pharma, Lupin, Glenmark Pharma, Astra Zeneca Pharma and Dishman Pharmaceuticals were among the stocks that gained.
Sugar stocks take a beating: A number of sugar stocks figured on the loser's list. Even as the Food and Agriculture Minister ruled out the reduction of import duty on sugar, the Finance Ministry said it was still under consideration. Stocks such as Oudh Sugar, Dhampur Sugar and Sakthi Sugars were among those that declined.
Reaction to company announcements: The stock of KEC International declined by Rs 1.75 to close at Rs 85.45 even as the company reported that it has received two new orders worth Rs 91 crore in the domestic market from Power Grid Corporation.
The stock of Saw Pipes went up by Rs 1.7 to close at Rs 186.75 on news that it plans to set up joint venture with Arcelor unit for making high-precision equipment for electronic, other industries.
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