Financial Daily from THE HINDU group of publications
Saturday, May 13, 2006
Columns - Sensor
The recent sporadic patches of rain that have cooled the blistering summer heat in parts of the country found a parallel in the stock market on Friday.
The overheated stock indices that have been steadily rising and breaking new ground for weeks in a row hit a second air pocket on the last trading session of the week, after witnessing a slide on Thursday. At the BSE, the Sensex was down by 150 points on Friday.
It was again the turn of the major frontline stocks to help cool off the market for the second day in succession. Stocks from the banking, oil, and cement sectors, closed in the red.
Two strong bouts of selling, one at the commencement of the session and the other towards the end, kept the indices in negative territory for most of the day.
The advances-to-decline ratio also reflected a bearish sentiment that prevailed in the market right from the opening. FIIs' purchases on Thursday totalled about Rs 322 crore in the cash market, but it could not make any difference to the overall sentiment in the market.
Among the mid-cap stocks, Unitech, which has doubled in a short span of time hit the upper circuit filter once again on the back of news that along with a stock split of its existing Rs 10 paid-up share into five equity shares of Rs 2 each, the company has also announced a bonus of 12 equity shares for every one held.
The stock of Hinduja TMT went on to touch a high of Rs 821 intra-day, before closing lower at Rs 779. The company had recently announced the demerger of its IT/ITES division and media/content distribution division.
The other buzzing stocks of the day were Novopan, Mahindra Gesco, Kamedhenu Ispat, Surya Roshni, Shriram City Union and Malwa Cotton.
Cement stocks, which have run on the back of a steady in increase in product prices, came in for special attention in the market, after the Industry Ministry asked manufacturers to lower the prices of the building material by May 15, failing which the Government may consider imposing a surcharge or banning exports to bring prices down.
All cement stocks, including ACC, Dalmia Cement, Gujarat Ambuja, Madras Cement, and Kesoram Industries, closed in the red on Friday.
Banking stocks such as SBI, Bank of Baroda, Syndicate Bank, Union Bank, ICICI Bank, and Canara Bank, which have run up recently on the back of the PLR hike, were hammered down on Friday.
The sole exception was HDFC Bank, which bucked the trend with a marginal gain.
Oil sector stocks including Kochi Refineries, HPCL, BPCL, and IOC, were down on the back of a continued rise in crude prices and the Government's delay in raising the fuel prices.
Super Spinning, which has witnessed a price run-up during the last few days along with a seven-fold increase in trading volumes, moved up on Friday as the company recommended a dividend and a stock spilt and announced plans to raise funds through the issue of GDR, FCCBs, and preferential allotment.
The specialty chemicals and edible oils maker, Godrej Industries, jumped up and hit the circuit filter to close at Rs 748 on the back of an announcement that the company is planning a stock spilt.
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