After Friday's crash, there were many who expected similar weakness in the indices today as well. Other Asian markets were extremely weak, with Japan losing around three per cent, following Friday's crash in the US markets. Markets opened with losses of close to two per cent in early trades.
The large sell-off many traders were expecting did not happen and the markets recovered part of the losses by mid-day. Oil stocks and auto sector stocks led the recovery on expectations of better performance as crude prices have declined.
Technical problems at the NSE led to the futures and options market being shut down for under an hour and trading hours were extended. Selling emerged again towards close and the indices declined as some of the gainers in the morning lost ground. Sensex closed at 6157, down 92 points and the Nifty at 1928, down 29 points.
Among index stocks, Dabur, Bharat Petroleum and Tata Motors were the biggest percentage gainers while SAIL, Nalco and ICICI Bank were the top losers.
On Friday, US markets saw one of the worst declines in the last two years with both Dow and NASDAQ losing around two per cent each. Investors have started worrying about future corporate performance as some of the major companies have come out with lower guidance. After a couple of years of strong growth world economy seems to be hitting level ground, which could affect corporate performance.
ADR's of Indian companies also fell, in line with the overall market weakness. Infosys, which opened with gains after the previous day's crash, ended with losses of close to two per cent. HDFC Bank was the biggest loser with losses of close to four per cent. Wipro and VSNL lost around three per cent each while Tata Motors, ICICI Bank and MTNL all lost more than a per cent each.
TCS, which will announce its results later this week, was one of the gainers early in the day. Analysts expect the company to post a marginal growth in revenues and profits for the fourth quarter as compared to the previous quarter. Volume growth is expected to be strong and margins to improve as the company has increased offshore revenues. The stock gave up most of its gains towards the end of the day and closed flat.
Satyam also traded in the positive zone earlier in the day before giving up all of its gains. Infosys continued its downtrend from Friday and closed with losses of over two per cent while Wipro lost under two per cent.
Bharti Televentures, one of the biggest losers among frontline stocks in morning trades, bounced back smartly as rating agency ICRA upgraded the company's debt rating. The stock closed with a marginal loss.
Steel stocks were badly hit in today's trade as steel and mining stocks were hammered down in other Asian markets. A slow down in world economy, which is worrying global markets now, would pull down the demand for steel especially from China. This could send steel prices on a downward spiral. SAIL lost over seven per cent and Tata Steel lost over three per cent.
Non-ferrous metal stocks also traded weak as international prices of copper, aluminium and zinc have all come down. Hindalco, Hindustan Zinc, Sterlite and Nalco were all losers.
Auto companies, which were beaten down during the last two weeks, bounced back strongly. Besides Tata Motors, other major stocks of the sector like Maruti and Mahindra & Mahindra also gained ground.
Jaiprakash Hydro Power made its debut on the exchanges today, both in the cash as well as F&O segments. Issued at Rs32 per share, the stock opened at Rs36.8 on the BSE but came under selling pressure. The stock fell below its issue price early in the morning with huge volumes. It traded in a range for the rest of the day and closed at Rs31.15 with over 46 million shares traded on the NSE.
Indiabulls Financial Services announced its results for the year ended March 2005. Profits have almost tripled to Rs56.7 crore as against Rs19.35 crore the year before. Total revenues have more than doubled to Rs168 crore from under Rs70 crore last year. The company had completed its GDR issue recently and is planning to enter retail finance in a big way.
Logistics company Gati has greatly improved its performance during the first nine months of its current fiscal. During the first three quarters ended March 2005, profits have doubled to over Rs7 crore on a revenue growth of under 20 per cent. The stock gained over 10 per cent in early trades.
In early trades, Videocon Industries maintained the strength exhibited on Friday. The company is planning to expand its energy business in a big way by acquiring oil and gas assets abroad. It is reported to have entered into an agreement with the government of Sudan to invest in oil fields there. The company currently has a small stake in a domestic natural gas property in the KG basin. The company is planning to raise resources from an overseas issue to part finance its energy sector plans.
Mid-cap steel stocks tracked the weakness in major steel stocks and posted major losses. Essar Steel was the biggest loser with losses of 10 per cent. Southern Iron & Steel, Ispat Industries, Uttam Galva, National Steel and Mukand were among the other big losers.
Jindal Vijayanagar Steel has reported a net profit of Rs404 crore on revenues of Rs2,192 crore for the quarter ended March 2005. For the full year, profits stand at Rs870 crore on total income of Rs6,698 crore. The company says it has achieved good volume growth in all product segments during the year. Exports for the year doubled as compared to the previous year. The company is confident of the future performance and expects steel industry to post better growth rates than the overall economy.
Dhampur Sugar also announced good results for the quarter ended March 2005. Profits have risen three fold to around Rs33 crore as compared to the same quarter of previous year. The company expects sugar prices to stabilise between Rs16 to Rs17 in the current year.
RPG Transmission, which is into construction of power transmission towers and lines, gained on news of an order worth Rs86 crore from the state of Rajasthan. The company is also in the business of railway electrification and erection of telecommunication towers.
Among the mid-cap gainers, RS Software, Geometric Software and South India Corp stood out.
Prime Securities, Hindustan Oil Exploration and Pantaloon Retail were among the major losers among mid-cap stocks.
*Disclaimer: The author does not have any position in the stocks specifically mentioned above at the time of writing this article. This analysis / report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content the author or publisher shall not be held responsible for any loss caused to any person whatsoever.