The Hindu Business Line : Techs weaken on Infosys warning

THE rally in the first two days of this week was aborted by the bearish sentiment that prevailed during Wednesday's trading. The benchmark indices such as the BSE Sensex and the S&P CNX Nifty closed on a weak note.

The Sensex closed at 6413.66, a drop of 37.64 points against Tuesday's close of 6451.3. The S&P CNX Nifty declined by 9.3 points to 2035.35.

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The drop in the prices of software sector stocks was a key factor affecting market sentiment.

Along with Infosys, the share price of quite a few software stocks, including TCS, Satyam Computer and Patni Computer closed on a weak note on Wednesday.

The weak sentiment was triggered by the warning issued by Infosys that its profitability may be under pressure owing to rising costs.

The Infosys stock logged a drop of Rs 32.7 at Rs 2,083.2. The share price of Satyam declined by Rs 9.85 or 2.4 per cent to Rs 407. Trading volumes spurted to 14.1 lakh shares from 8.9 lakh shares recorded on Tuesday.

The firm trend in the share price of Reliance Industries played a role in mitigating the damage to the indices. The share price of Reliance increased by Rs 9.15 to Rs.494.65. Another group company - IPCL too found a place in the gainers list.

Apart from Reliance, Bharti Televenture and Bajaj Auto were the other prominent gainers out of the 30 stocks that constitute the Sensex. The share price of Bharti Tele stock increased by Rs 4.15 and Bajaj Auto by Rs 19.85.

Amidst the weak sentiment and profit-booking in quite a few stocks, market interest was evident towards public sector banks. While the private sector banks ruled the roost in the past few days, it was the turn of public sector banks to grab market attention during Wednesday's trading.

The share price of quite a few banks, including Andhra Bank, Bank of India and Union Bank found a place in the gainers list.

In the case of Andhra Bank, the share price increased by 3.7 per cent to Rs 80.45. From 1.7 lakh shares recorded on Tuesday, trading volumes jumped to 8.8 lakh shares on Wednesday.

While a few public sector banks settled at higher levels, State Bank of India was a prominent absentee from the gainers list.

The share price of the company dropped about 1.5 per cent to Rs 594.15. Trading volumes remained almost unchanged around the 11-lakh mark.

Companies such as IDBI, IDBI Bank, Strides Arcolab, Bank of Rajasthan and Crompton Greaves were the other prominent gainers of the day.

The share price of IDBI and IDBI Bank settled at higher levels on reports that the swap ratio for the proposed merger would be decided early next month.

The share price of IDBI closed at Rs.107.95, up 5.5 per cent over Tuesday's close. Trading volumes were quite heavy at 32 lakh shares on Wednesday in comparison to 8.4 lakh shares the previous day.

Buying interest was also evident in the Strides Arcolabs counter. The stock registered a 4 per cent gain on Wednesday on the back of increased trading volumes. From about 4 lakh shares transacted on Tuesday, the trading volumes jumped to 5.2 lakh shares on Wednesday.

The buying interest in Strides Arcolab appears to have been triggered by reports that the company has allied with Mayne Group of Australia.

The company is also convening an EGM on January 18, 2005 to seek shareholder approval for the proposal to offer 30 lakh shares on a preferential basis to Elcemar Almeida & Associates at a price of Rs 200 per share.

Along with software stocks, companies that have logged sharp gains recently have found place in the losers list.

The likes of Elder Pharma, GSFC, India Cements are prominent amongst the losers.

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