Indices finally stump the uprising on profit booking

21 November 2005

The markets opened on a steady note today, but soon lost ground. The indices were trading with losses of a per cent each within an hour of opening as profit booking emerged after a long gap.

Buying at lower levels helped the indices to recover and a definite up move started before noon. After going very close to Friday's closing levels the frontline indices slipped again. The downtrend persisted till closing. The indices slipped considerably in the closing minutes, bit the last half hour averaging helped them to reduce the losses.

Banking stocks had a rough day, as ICICI Bank lost 3 per cent after declining a per cent on Friday. HDFC Bank closed nearly 3 per cent lower. SBI lost close to 2 per cent while PNB closed flat. HDFC added over 2.5 per cent.

Steel stocks gave up their Friday gains as both SAIL and Tata Steel lost around 2.5 per cent each. Among the other metal stocks, Hindalco was the big loser. The stock closed nearly 2.5 per cent lower, adjusted for the rights entitlement.

Cement was once again one of the best performing sectors today, led by Grasim. The stock closed with gains of more than 3 per cent. Gujarat Ambuja managed to close flat the spectacular rally on Friday while ACC lost a per cent.

Technology stocks had a mixed day today. HCL Technologies was the sole winner, adding well over 2 per cent. Satyam lost close to 2.5 per cent. Infosys declined well over a per cent while TCS and Wipro lost over half a per cent each.

Two-wheeler stocks maintained their strength in today's trading as both Bajaj Auto and Hero Honda closed with gains. Both stocks added around 2.5 per cent each. For Bajaj Auto, today's close is yet another lifetime high.

Four-wheeler stocks did not fare well as Maruti came under selling pressure and lost well over 2 per cent. M&M added over half-a-per cent. Tata Motors ended marginally lower.

Pharma stocks had a relatively better day, led by Cipla which gained close to 1.5 per cent. Glaxo and Sun Pharma closed with gains of half a per cent each. Dr Reddy also closed half a per cent higher while Ranbaxy was the sole loser in the big pharma sector, closing more than a per cent lower.

Both ONGC and Reliance Industries added a third of a per cent each, but were not strong enough to help the indices.

Tata Chemicals and Jet Airways were the other significant gainers among index stocks.

Sensex closed at 8611, a loss of 76 points, and the Nifty at 2603, lower by 17 points. Nifty November futures closed at a discount of 3 points to the spot index.

Grasim, Hero Honda and HDFC were the major gainers among Nifty stocks while Reliance Energy, ITC and ICICI Bank were the major losers.

Bajaj Auto may spend up to Rs200 crore next year to expand capacity to 3- million units per year from 2.4-million at present. The company has been steadily gaining market share this year and is planning to launch three new motorcycle models and four new scooters according to news agency reports.

Mid-Cap Action

Mid-cap action also came under selling pressure and declined. There was no panic sell off and buying support was seen in good quality stocks at lower levels. Losses on the mid-cap index were marginally lower than the frontline indices. The CNX Mid-Cap index lost 23 points and closed the day at 3756.

Steel manufacturer Ispat Industries tumbled today after the company announced an equity restructuring package. The company said it is planning to reduce equity capital by 40 per cent. Shareholders would be issued redeemable preference shares to compensate for the reduction in capital. The preference shares are redeemable after 11 years.

Ispat has also announced that an unlisted company called Ispat Metallics would be merged with it. The shares of Ispat would be suspended from trading till the restructuring procedures are completed. The company had reported disappointing results for the second quarter and the management had blamed heavy rains for the losses.

Software company Aztec will spend Rs40 crore to set up a new development centre near Pune. The facility would have the capacity for 1,500 employees and would focus on systems integration.