The Hindu Business Line : Inexorable onslaught keeps all indices in red

Trading highlights
Concern over US interest rates haunts global markets
Advancing stocks dwindling in number
Capital goods sector bear the brunt of bear attack

In what appeared to be an inexorable onslaught by the bears, the markets received yet another pounding on Tuesday. Selling was witnessed across all the indices with just two of the Sensex stocks weathering the bear's challenge.

The Sensex extended its decline since the May 10-peak, to 39 per cent. The domestic market tracked the Asian markets, which, witnessed declines across the board. Concerns of hike in the US interest rates appeared to scare investors into a selling spree in emerging markets.

The slumping volumes reflected the caution of investors and traders who kept away from the market. Turnover at the BSE was lower by 1.6 per cent to Rs 2708 crore on Tuesday. Selling pressure was evident in stocks such as IFCI, Gujarat Ambuja Cements, ITC and Reliance Petroleum, which witnessed high volumes.

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The advance decline ratio at the BSE clearly reflected the bear's domination. Declining stocks outnumbered the advancing stocks by a ratio of 9:1.

State Bank of India and ONGC were the only stocks in the Sensex that managed to remain unshaken and ended marginally higher. All the sector indices were thrashed, with the BSE Oil & Gas taking the least hit of 4 per cent.

Sector focus

Even as the metals index took a beating of more than 6 per cent, the BSE capital goods index bore the brunt of the attack. Front line players, Larsen & Toubro, Thermax, ABB and Suzlon Energy saw declines in the range of 4-12 per cent. Praj Industries and Aban Loyd Chiles closed 10 per cent lower.

Reports of Bharat Heavy Electricals' plans to supply power generation equipment to Bangladesh appeared to have little effect on the markets even as the stock took a thumping of 8 per cent.

With a decline of 35 per cent since May 10, the capital goods index is more than halfway towards wiping out the 55 per cent-gains made since January 01, 2006.

Weakness in international metal prices pushes the metal stocks to further lows. Sesa Goa fell by 8 per cent to Rs.850. National Aluminium, Sterlite Industries and Hindustan Zinc ended in the red. Hindalco lost 3 per cent; the company had earlier reduced its prices by 4.8 per cent.

Auto sector was next in the line to get battered. Mahindra & Mahindra took a beating of 8 per cent. Hero Honda, Maruti Udyog and LML lost in the range of 6-7 per cent. Tata Motors won an order worth Rs 50 crore to supply buses to Congo in Africa. The announcement did not, however, prevent the company's stock from losing 4 per cent to Rs 698.

Stock-specific action

Health-care equipment maker, Opto Circuits approved a plan to offer one free share for every share held by its stockholders. The stock ended lower by 5 per cent.

Gujarat Gas fell by Rs 97.5 to Rs 1000.6. A unit of UK's BG Group has acquired Gajarat Gas' power generation business for Rs 10.9 crore.

Ponni Sugars, Celebrity Fashions, Monsato and JBM Auto were some of the prominent gainers among Nifty constituents. Newly listed stocks Deccan Aviation and Unity Infraprojects declined further by 14 per cent and 16 per cent respectively.