The Hindu Business Line : Hindustan Lever drags Sensex down

THE markets, led by the index heavyweights, trended lower on Thursday's trading, with the BSE Sensitive Index shedding 15.7 points to close at 6,577.8. The Nifty too lost value to close at 2,063.4 points, down seven points.

Data on investments from foreign institutional investors continued to be positive and disclosed net purchases on the previous day.

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Technology and FMCG stocks were instrumental in weighing down the index. Mid-cap stocks fared better than the index stocks, with the CNX Midcap index posting better returns than the Nifty.

Bank stocks and PSUs posted gains, with the BSE Bankex and PSU index putting on value during the day's trading even as the bellwether indices lost.

Index movers

The sharp reversal in HLL proved instrumental in dragging down the Sensex on Thursday. The stock closed at Rs 154, 3.9 per cent lower than the previous close.

Disappointing financial numbers from the parent - Unilever, which reported a sharp drop in net profits and less than a 1 per cent growth in revenues - appear to have contributed to the pressures on the HLL stock price. The company is set to announce its full-year numbers on Friday.

The Colgate-Palmolive stock also trended lower, losing 2.1 per cent. Among the other index stocks, HDFC (down by 2.8 per cent), Zee Telefilms (down by 3.7 per cent) and Bharti Televentures (down by 2.1 per cent) also weighed on the Sensex.

Though the number of declining stocks at 16, outnumbered advances (14) in the Sensex basket, Tata Power and ICICI Bank posted significant gains.

The Tata Power stock closed higher by 2.5 per cent while ICICI Bank also notched up a 2.2 per cent price gain.

Frontline stocks

Among the other frontline stocks, i-flex Solutions (down 2.7 per cent) and Hindalco (down Rs 20) also shed value. Reports suggested that Vedanta Corp could set up a new 2.5-lakh-tonne aluminium smelter at Orissa.

This will enhance competition for Hindalco, which earlier this week announced a new expansion project, funded partly by debt.

Media stocks TV Today and NDTV appreciated during the day, while Zee Telefilms lost value.

While the TV Today stock rose by 5.2 per cent to close at Rs 94, NDTV posted a 2.4 per cent gain and closed at Rs 181.

Steeling up

Steel stocks were much in favour for the day, with stocks such as SAIL, Jindal Vijaynagar, Sunflag Iron and Steel and SAL Steel all registering significantly higher trading volumes.

The Jindal Vijaynagar stock clocked trading volumes of 5.2 crore shares and climbed by Rs 2.6 to close at Rs 21.2. The company's board cleared a dividend of Rs 3 per share during the day.

SAIL entered into a new agreement with GAIL for the supply of natural gas to its plants from 2006-07.

Petronet LNG also attracted significant trading volumes of 48 lakh shares.

The company has announced plans to replace existing debt in order to bring down financing costs.

Select construction contractors and engineering stocks were also in the limelight.

Among these were Bharat Forge (up Rs 65 to close at Rs 1,347), Gammon India (up Rs 71 at Rs 855), Kirloskar Brothers (up Rs 63 at Rs 868) and Siemens (up Rs 58 at Rs 1,596).

Bharat Forge indicated in an interview that it could soon announce acquisition(s) in North America.

The Siemens stock rose on its parent's plans to invest $500 million to step up research and development activities in India in the years to 2009.

Pharma stocks displayed divergent trends during the day. While Wockhardt and Astra Zeneca Pharma managed gains, the Abbot Labs stock fell sharply, shedding Rs 26 during the day.

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