The Hindu Business Line : Stocks suffer as Sensex sees biggest two-day decline

It was yet another day of markets drowning in a sea of red. Although the bears dominated the show, markets regained over 200 points after buying opportunities was perceived at lower levels. The Sensitive Index witnessed its biggest two-day decline in about six months. Stocks from the banking, engineering and FMCG space were major losers.

Domestic markets failed to pick the cue from the Asian indices, a majority of which closed the day in the positive. The pessimism in the capital market also appeared to have influenced the domestic currency. The Indian rupee declined as much as 0.5 per cent, to Rs 45.4. FIIs also exercised caution as they reversed their net-buying trend. Overseas investors were net-sellers to the tune of Rs 422 crore on April 10.

Buzzing stocks

Select stocks from the BSE 30 basket (Sensex) evinced buying interest. Dr Reddy's Laboratories rose 3.3 per cent to Rs 1,472. The company plans to sell its copy of Sanofi Aventis's allergy drug in the US. It has received approval for the same from the US Food & Drug Administration. Another heavyweight stock Maruti Udyog added Rs 28.6 to Rs 870 after it announced plans to acquire Suzuki Motor's 30 per cent stake in their joint venture-Maruti Suzuki Automobile India, and consolidate the unit. Unitech and BF Utilities managed to hit the upper circuits despite volatile trading witnessed in the broad markets. Hindustan Zinc and Varun Shipping were among the stocks that reached new highs during intra-day trade.

Sector focus

Markets appeared to view IT stocks with caution on the back of impending financial results and guidance of Infosys. Except for TCS, major IT stocks such as Infosys, Satyam Computer Services and HCL Technologies closed in the red.

Select metal stocks made marginal gains. Firm metal prices on the LME even as copper and zinc prices surged to new highs yesterday, appeared to have triggered positive sentiments. Tata Steel, Jindal Stainless, Hindalco, Madras Aluminium and Jai Corporation weathered challenges from the bears and moved northwards.

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Banking stocks bore the brunt of the bear's attack. While Corporation Bank declined by 6.3 per cent to Rs 340, Canara Bank, Indusind Bank and ICICI Bank declined by 3-4 per cent.

Stock-specific action

Ambuja Cement Eastern plans to spend Rs 800 crore to expand capacity at its clinker unit in Chhattisgarh. The stock rose 5.4 per cent to Rs 81.6.

GAIL has been short-listed to bid for gas exploration in Ethiopia jointly with Gujarat State Petroleum. The company has also entered into an agreement to supply gas to Rajasthan Rajya Vidyut Utpadan Nigam. The stock added 1 per cent to Rs 309.

Reliance Industries added Rs 18.5 to Rs 847. Chevron Corp of the US has agreed to acquire a $300 million (Rs 1,360 crore) stake in Reliance Petroleum. Chevron will have an option to increase its stake to 29 per cent.

Pidilite Industries, Zensar Technologies, ITD Cementation, Thermax, AIA Engineering and Inox Leisure were prominent gainers among the Nifty constituents. Recently-listed Malu Paper Mills, Hinduja TMT, Madras Cement, Kalpataru Power Transmission and Glenmark Pharmaceuticals were conspicuous losers.