Financial Daily from THE HINDU group of publications
Friday, Apr 29, 2005
Markets - Commentary
Columns - Sensor
Banking stocks shed considerable value
MARKETS ended on neutral territory for the day, with the BSE Sensex putting on just five points at 6284 and the Nifty adding 6 points at 1941 points.
Mid-cap stocks seem to underperform the index heavyweights, with both the BSE Midcap Index and the CNX Midcap registering marginal losses for the day. Banking stocks were in the limelight during the day's trading, with a majority of the stocks in the sector shedding considerable value. Technology stocks either held ground, or registered appreciation.
The stocks that advanced and those that declined were evenly balanced in the Sensex basket. Data from SEBI revealed that net sales by foreign institutional investors were almost balanced out by net purchases by mutual funds, on Wednesday. While FIIs made net sales of Rs 134 crore, mutual funds pumped in Rs 132 crore.
Index movers: ITC (up 3.5 per cent), Hero Honda (up 3.4 per cent), Satyam Computer (up 2.8 per cent) were the major gainers within the Sensex basket. ICICI Bank and SBI led the losers' list shedding 2.3 per cent and 2.4 per cent, respectively. HDFC was among the strong gainers, with the stock putting on 2.4 per cent to close at Rs 748. The Reliance Industries stock did not see a very sharp move, despite the strong numbers announced on Wednesday.
Banking stocks plunge: Banking stocks, irrespective of whether they were PSUs or private banks, were drubbed during the day's trading with 15 of the 16 stocks in the BSE Bankex losing ground during the day. The markets did not appear to take kindly to the repo rate hike announced in the Credit Policy, which raised the rate from 4.75 per cent to 5 per cent. Other benchmarks such as the bank rate and cash reserve ratio, were not changed. The RBI also announced strong growth in money supply and forecast a strong GDP growth in the Policy.
Smaller bank stocks registered even sharper loses in value than frontline stocks. Bank of India , shed 7.2 per cent at Rs 86 and Union Bank, which lost 6.9 per cent to close at Rs 102.8, were among the biggest losers of the day.
Numbers set the tone: The quarterly and year-end numbers announced by companies set the tone for the trading in other sectors. Bharti Tele Ventures registered gains of Rs 5 to close at Rs 207.6 after the company reported a 44 per cent rise in its fourth quarter profit. Ashok Leyland rose 4.5 per cent at Rs 23. The company announced its numbers after the close of trading hours. Rajasthan Spinning was among the top gainers in mid-cap space, gaining 9.9 per cent to close at Rs 97. On Wednesday, the company reported a 28 per cent growth in its net profit for the quarter ended March 2005.
Ranbaxy Labs registered a 1.1 per cent gain to close at Rs 917, despite a sharp fall in the net profit reported by the company for the latest quarter. The company has also announced a stock split, which will sub-divide each share into two.
Polaris Software was battered on Thursday, with the stock losing 14.7 per cent to close at Rs 97.3. The company reported a sharp deterioration in the profits for the March 2005 quarter. Raymond India was down 3.3 per cent at Rs 327.6. The company's reported profits declined sharply for the March quarter.
Midcap movers: Kirloskar Brothers, up Rs 32 at Rs 1,320, Crisil (up Rs 25 at Rs 827), Dishman Pharma (up Rs 21 at Rs 704) were among the major movers of the day. NMDC, Siemens India and Madras Cements recorded significant losses in value.
Active stocks: Ashok Leyland, Varun Shipping, Eveready Industries and Whirlpool of India were among the stocks which attracted significant trading volumes on Wednesday. Newly listed stocks Gokaldas Exports and Gateway Distriparks continued to draw significant trading interest. Eveready, which re-listed after its restructuring took effect, was also among the gainers for the day. Hexaware Technologies settled at Rs 140, as a 5:1 stock split took effect.
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