Financial Daily from THE HINDU group of publications
Thursday, Jun 01, 2006
Columns - Sensor
FIIs sold stocks worth Rs 651 crore.
While 82 pc of the BSE stocks declined, only 15 per cent advanced.
FMCG sector bears the burnt.
Volatility and choppiness has become clichéd phrases to describe the markets, as markets are reacting wildly every other day. Foreign funds have been pulling out funds from the emerging markets over the last two weeks on concerns that emerging markets are overheated and global interest rates may go up in the near term. The rupee depreciation too has triggered the sell off.
Foreign funds have been net sellers for more than 10 days in a row. According to provisional BSE data, FIIs sold stocks worth Rs 651 crore on Wednesday too. Close to Rs 11,500-crore worth of stocks have been sold by FIIs in May alone. A number of firms such as Merrill Lynch and CLSA have predicted that the correction may not be over and it would not be surprising to see Sensex at 9,000-levels. They have also indicated that it will then be the time to re-enter the market. Eighty two per cent of the stocks traded on the BSE declined and only 15 per cent advanced.
In the midst of the gloomy outlook going around, one ray of hope was the GDP numbers released on Wednesday. The GDP numbers showed a strong pick up in agricultural growth in the fourth quarter to 5.5 per cent. The 11th plan has been submitted to the Prime Minister and according to Mr Montek Singh Ahuluwalia, Deputy Chairman of the Planning Commission, the outlook looks quite strong and the hike in petrol prices would be the only hitch. After falling close to 567 points intraday, the Sensex recovered a bit, finally losing 388 points.
Despite the likelihood of another steel price hike in the offing, steel stocks were pounded. Surprisingly, the BSE FMCG index lost almost seven per cent intra-day. For all the hype about consumerism and rural demand picking up, FMCG stocks too had to bear the brunt of an all round negative sentiment. Stocks such as Dabur, HLL, Marico slid. Godrej Consumer slid marginally.
Stocks of brokerage houses such as IL&FS Investsmart, Indiabulls closed on a positive note even as Geojit Financials and India Infoline took a hit.
Winners & losers
Unitech continued its upward journey irrespective of the market movement. Blue Dart, Adani Exports, Sundaram Clayton, and IPCA Labs are other stocks that gained in excess of five per cent in a rather choppy day. Trent, IndoRama Synthetics, PSL, ICI India, Mothersun Sumi Systems are other gainers.
Balaji Telefilms, Bank of Baroda, Tata Steel, ICICI Bank, BEML, Bombay Dyeing and Century Textiles were among the top losers.
The BSE SmallCap and BSEBankex lost almost four per cent. The BSE Midcap index, however contained the slide to 2.7 per cent.
A few stocks that have managed to stay sturdy through the mayhem starting May 10, when the markets hit its all time high are
Adani Exports, Astra Microwave, Unitech and South East Asia Marine.
Among capital goods stocks, Havells India and Voltas managed to escape with minimum losses.
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