Financial Daily from THE HINDU group of publications
Friday, Jun 10, 2005
Columns - Sensor
Profit-bookings snap 5-day rally
AFTER recording consecutive gains in five trading sessions, the markets saw some correction on Thursday. Profit-booking among the IT and banking stocks dragged the indices down. While Sensex was down by about 40 points, Nifty closed lower by about 10 points.
The markets opened on a weak note and remained range-bound throughout the day. The benchmark Sensex opened at 6858.7, slipped to a low of 6813.2 and recovered in the final hour of trading to close at 6832.53. The S&P CNX Nifty opened at 2112.3, reached an intra-day low of 2097.5 and closed at 2103.2.
Weakness in global markets coupled by concerns of a likely rise in interest rates by the US triggered the fall in the Indian markets. The bears were active across most of the counters, which was reflected in the advances to decline ratio at 0.8.
The IT and banking stocks, which led the bull rally in the last few sessions, took a beating as investors booked profits. While most of the index heavyweights managed to buck the negative trend, the second rung, mid- and small-cap stocks bore the brunt of the bear attack.
Among the IT stocks, Infosys was the biggest loser, which shed Rs 61.4 or 2.7 per cent. Following the IT major, Satyam, Wipro and TCS also declined by 1.9, 0.8 and 1.1 per cent respectively. Patni Computers, Geometric Software, HCL Technologies and MphasiS BFL also ended weak. While the BSE-IT Index was down by 1.9 per cent, the CNX IT Index lost 1.5 per cent. However, buying support in Polaris, NIIT Technologies, iGate Global and Sonata Software helped them post modest gains.
Banking stocks also witnessed a sharp selling pressure. ICICI Bank was down by 1.4 per cent. Vijaya Bank, Allahabad Bank, HDFC Bank, Oriental Bank, UTI Bank, Kotak Mahindra Bank and Indian Overseas Bank suffered sharp losses.
There was mixed action across the consumer goods stocks counters. HEG was a significant gainer; its stock shot up by 8.2 per cent. Alfa Laval, L&T, BHEL, BEML, Praj Industries and Siemens also ruled firm. However, Gammon India, Alstom Projects, Thermax, Crompton Greaves and HMT succumbed to bear attack.
There was selective buying among the metal stocks, which added some support to the markets. Most of the steel stocks were up after the Government asked the steel-makers to increase production by 10 per cent annually to meet the demand that is forecast to double in seven years.
While Jindal Stainless rose sharply by 9.2 per cent, Welspun Gujarat advanced by 6.6 per cent. Southern Iron and Steel, Lloyd Steel, Uttam Galva, Ispat Industries, Hindalco, Bhushan Steel and Strips, SAIL, Madras Aluminium, Hindustan Zinc and Kalyani Steels also registered modest gains.
A bout of buying activity took place among select FMCG stocks. HLL, Gillette, Nirma, McDowell, Britannia, Nestle, Marico, Tata Coffee and P&G saw sustained buying support. Henkel Spic suffered a steep loss of 3.5 per cent. Profit booking among Jindal Photo, Shaw Wallace, Tata Tea, Dabur India, ITC and Ruchi Soya kept them in the negative territory.
The bearish sentiment was quite widespread among the auto stocks. Ashok Leyland, Asahi India, Apollo Tyres, Maruti Udyog, TVS Motors, Tata Motors and Escorts ended the day in red. However, buying interest in M&M, Sundaram Fasteners, Bajaj Auto and Eicher Motors helped them post respectable gains.
Among the oil and energy stocks, HPCL, BPCL and Reliance made smart gains. Hindustan Oil Exploration was down by 3.1 per cent, while ONGC, Chennai Petroleum, GAIL and IOC also suffered sharp losses.
Other prominent losers on the Nifty were Amara Raja Batteries, Arvind Mills, GE Shipping, IVRCL Infrastructure, Nagarjuna Construction and Neyveli Lignite.
Those that constituted the gainers' pack were Asian Paints, Bharat Forge, MICO, Mahavir Shipping, Pantaloon Retail, Raymond and Titan Industries.
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