The Hindu Business Line : FMCGs, IT witness correction; auto mixed

AFTER a sharp rally of 230 points in last five trading sessions, markets witnessed some correction. Weakness in the Asian markets, concern of rising crude oil prices and the news report of the militant attack in Ayodhya appeared to have dampened the overall market sentiment.

While the benchmark Sensex was down by 57 points, the Nifty suffered a loss of 19.9 points.

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On Tuesday, the markets opened on a weak note and stayed volatile during most part of the day. Although there was across-the-board selling, index heavyweights came in for the biggest onslaught.

The Sensex opened at 7275, rallied sharply as it crossed the 7300-mark. However, profit-taking in the last hour of trading dragged the index down.

The S&P CNX Nifty opened marginally higher than its earlier close at 2231.2, reached an intra-day high of 2238.6 before closing at 2210.8.

The undertone in the markets was bearish as 409 scrips advanced while 832 shed value.

IT stocks, which contributed significantly to Monday's rally, witnessed steep correction. Investors appeared cautious ahead of the earnings on concern that they may remain flat from the earlier quarter.

While the frontline stocks such as Infosys, Satyam, Wipro and TCS suffered sharp losses, the second-rung stocks also witnessed profit taking.

Rolta, Polaris, i-flex, Patni Computers, HCL Technologies, Hexaware and iGate Global remained subdued.

Most of the FMCG stocks succumbed to the bear attack. ITC recorded some gains in the morning session on expectation that its purchase of a controlling stake in Wimco will help it expand its matchbox business. However, bearish sentiment pulled the stock down in the end.

McDowell, Henkel Spic, Jindal Photo, Colgate Palmolive, Nirma, Tata Tea, HLL, Dabur India, Nestle and Tata Coffee also ruled weak.

Auto stocks saw mixed bag of response. TVS Motor, CEAT, Bajaj Auto, Hero Honda, Hindustan Motors and Escorts registered declines.

However, Tata Motors was a significant gainer whose stock was up by four per cent. Amtek Auto was up sharply after the auto parts maker said that it plans to buy Zelter, a German maker of turbochargers. It closed the day with a gain of 1.2 per cent.

In the capital goods sector, the stock of Siemens flared by about six per cent after its parent Siemens AG won an order from the Torrent group to build a power plant in India.

Buying interest was also seen among the stocks of ABB, SKF India, L&T, BHEL, Crompton Greaves and Alfa Laval. However, Alstom, BEML, Thermax, Dredging Corporation, Gammon India and KEC International remained weak.

There was widespread action among the pharmaceutical stocks. Elder Pharma surged by 11.7 per cent while Divi's Lab, Dr Reddy's, Morepen Lab and Shasun Chemicals recorded respectable gains.

Mixed action took place across the counters of metal stocks.

Steel stocks that gained included Lloyd Steel, Sesa Goa, Jindal Vijaynagar, Essar, Tata Steel, SAIL and Navbharat Ferro Alloys.

Most of the stocks in the non-ferrous metals space took a beating. Madras Aluminium, Hindalco, National Aluminium and Hindustan Zinc came in for sharp selling pressure.

The banking stocks could not arrest the bearish sentiment. Profit booking across the counters of SBI, Bank of India, Oriental Bank, Canara Bank and Indian Overseas Bank pulled them down.

However, selective buying interest among the stocks of ICICI Bank and HDFC Bank kept them in the positive territory.

Extending the gains made on Monday, most of the media and entertainment stocks put up a smart show. TV Today, Media Video and Zee Telefilms gained significantly.

Other prominent gainers on the Nifty were Balaji Telefilms, Blue Dart Express, Indo Rama Synthetics and IVRCL.

Those that were included in the losers' pack were Abbott India, Amara Raja Batteries, Gammon India and GE Shipping.

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