Indices tumble once again as weakness continues across Asia

24 October 2005

The sharp bounce back on Friday turned out to be a brief one-day affair as the indices lost ground once again. FII's continued their sales in the cash market on Thursday as well even though they were net buyers on the futures segment on Friday. The weakness in Asian markets kept the sentiment low and frontline stocks declined in the absence of buying support.

Indices opened with a positive gap, retaining the strength of Friday's closing. They slipped into the negative soon after as many sectors turned weak. After declining a per cent by noon, the indices made an attempt at recovery in early afternoon trades.

Fresh selling in late afternoon trades took the Sensex to the 7900 mark and the Nifty well below 2400. The selling pressure was particularly heavy in the last half hour and the indices closed at the lows of the day with losses of around 2 per cent each.

Pharma stocks were the worst affected in today's decline as industry leader Ranbaxy came under heavy selling pressure. At one point the stock was trading with losses of almost 10 per cent before closing almost 9 per cent lower. Sun Pharma lost 9 per cent while Dr Reddy shed close to 4 per cent.

Steel stocks continued to give up substantial ground today as well. Tata Steel was the major loser, closing over 4 per cent lower. SAIl lost two and a half per cent.

Tata Power, which had gained over 7 per cent on Friday, lost close to 5 per cent.

ONGC lost more than 3 per cent and pulled down the indices substantially, especially the Nifty. Reliance Industries lost close to 2 per cent.

Banking stocks lost ground ahead of the credit policy announcement by RBI tomorrow. A set of mediocre results from second rung banks also affected the sentiment. Oriental Bank of Commerce was the biggest loser, closing more than 3 per cent lower.

SBI, which is yet to announce its quarterly numbers, gave up two- and-a-half per cent. HDFC Bank and ICICI Bank lost close to 2 per cent each.

Technology stocks gave up some of their gains from the previous week. Wipro was the biggest loser closing more than 3 per cent lower. Infosys and TCS lost one-and-a half per cent each. Satyam was the sole winner in this space adding close to a per cent.

FMCG stocks also lost ground with ITC being the biggest loser, closing more than 3 per cent lower. HLL declined over 2 per cent.

Auto stocks were among the best performing in today's session. Bajaj Auto led the pack with gains of over 3 per cent. Maruti closed more than 2 per cent higher while Tata Motors added a per cent.

Stocks of oil marketing companies remained firm as crude prices have declined over the last week. BPCL added two-and-a-half per cent while HPCL closed more than a per cent higher. Indian Oil closed more than 2 per cent higher.

Cement stocks maintained their up trend from Friday and closed with gains. Gujarat Ambuja Cements added over 2 per cent while ACC closed more than half a per cent higher.

Sensex closed at 7921, a loss of 148 points, and the Nifty at 2395, lower by 49 points. Nifty October futures closed at a discount of 7 points to the spot index.

Bajaj Auto, BPCL and Maruti were the few gainers among Nifty stocks while Sunn Pharma, Ranbaxy and Tata Power were the major losers.

Crude oil futures for December delivery have declined further by one-and-a-half per cent to below $60 in Asian and early European trades today. Crude oil futures are trading at $59.71 per barrel in early European trades today.

Indian Oil is planning to invest up to $15 billion over the next few years to expand its capacities and enter new businesses. The company will focus on new businesses like oil and gas exploration, petrochemicals and marketing of natural gas. In petrochemicals alone, the company is planning an investment of over $5 billion. Indian Oil is targeting a top line of $60 billion by the year 2012.

ONGC is reportedly scouting for other partners for developing the natural gas finds in the KG basin after talks with BP were unsuccessful. BP is reportedly more keen in a tie-up with Reliance Industries, which had made another discovery in the same area. ONGC holds a 90-per cent stake in its block with the balance being held by Cairn Energy. News agency reports suggest that ONGC is also interested in exploring for natural gas in Bangladesh.

Dabur India has reported a net profit of Rs64 crore for the quarter ended September as against Rs43 crore during the same quarter of previous year. Total income for the period was at Rs471 crore as against Rs373 crore during the previous year. The company has declared a bonus issue in the ratio of one share for every share held. Dabur has also announced an interim dividend of 150 per cent.

Canara Bank has reported a lower net profit for the quarter ended September despite a rise in total income. Profits for the quarter were at Rs307 crore as against Rs397 crore during the same quarter of previous year. Total income at Rs2,494 crore was higher by 13 per cent as compared to the previous year figure of Rs2,206 crore.

Union Bank of India has reported a 70 per cent drop in profits for the quarter ended September. Profits were at Rs61 crore as compared to Rs211 crore during the previous year. Total income for the quarter was at Rs1,560 crore as against Rs1,354 crore.

Kochi Refineries has reported a lower net of Rs163 crore for the September quarter as compared to Rs173 crore during the same quarter of previous year. Total revenues for the quarter were at Rs3,678 crore as against Rs3,077 crore.

Reliance Capital has reported a consolidated net profit of Rs163 crore on total revenues of Rs246 crore. The stock closed more than 4 per cent lower.

Jet Airways has signed the formal agreement with Airbus to acquire 10 A330 long range aircrafts. The airline would have the option to purchase an additional 10 aircrafts. The stock declined over 3 per cent.

Mid-Cap Action

Mid-caps were much better off today as the index remained in positive territory till very late in the afternoon. After opening firm in line with the frontline stocks, the mid-cap index notched up gains of close to a per cent before slipping gradually over the session. The CNX Mid-Cap index lost 4 points and closed the day at 3534.

Net profit of Corporation Bank almost tripled to Rs106 crore during the quarter ended September as compared to Rs27 crore for the previous year. Total income for the quarter was at Rs785 crore as compared to Rs686 crore during the previous year quarter.

Indo-Gulf Fertilisers has reported a net profit of Rs22 crore for the quarter ended September as against Rs16 crore during the same period of previous year. Total revenues declined over 9 per cent to Rs219 crore as compared to Rs242 crore during the previous year quarter.

According to media reports, Essar Oil would close down 200 fuel stations out of a total of over 500 as a temporary measure to cut losses on fuel retailing. The company has been importing refined products in bulk for retailing in the domestic market. The company's much delayed refinery project is expected to start commercial production by next year.

Domestic stock broking company India Infoline would acquire Moneytree Consultancy, a distributor of home loan products. The target company is privately held and the cost of acquisition has not been disclosed.

Pharma company Lupin has entered into a contract manufacturing agreement with GSP Philippines for manufacturing anti-TB drugs.