Indices decline further as markets wait for more results

16 January 2006

With no major result announcement due, the markets were expected to remain subdued today. Traders are waiting for the special trading session, set for Wednesday exclusively for the Reliance Industries stock, to give further direction to the markets.

The indices opened on a weak note and by mid-morning the Sensex slipped below the 9300 mark. The technology heavyweights, ICICI Bank and Reliance Industries came under pressure early in the morning.

The recovery started soon after and by early afternoon both indices inched back to positive territory for a short while. Further selling saw the indices slip again, and by close, they were almost at the day's lows touched earlier.

Telecom stocks were among the weakest in today's market. MTNL lost nearly 4 per cent, continuing its poor run of the last two sessions. VSNL lost nearly 2 per cent while Bharti closed flat.

Steel stocks continued their decline as investors have negative expectations from the sector for the next year. SAIL lost close to 4 per cent while Tata Steel closed 3 per cent lower.

Technology stocks were weak as the frontline stocks came under a fresh bout of operator unloading. TCS declined more than 2.5 per cent while Infosys lost over 2 per cent. Satyam closed lower by 1.5 per cent.

Gail India, IPCL, ICICI Bank and Grasim were the other major loser among frontline stocks.

ACC added over 2.5 per cent and was the best performer among index stocks.

Pharma sector had a decent run today as most of the large stocks closed firm. Ranbaxy led the pack with gains of over 1.5 per cent. Glaxo, Sun Pharma and Dr. Reddy all gained over 0.5 per cent each.

Engineering stocks L&T, ABB and BHEL had a good day. L&T closed 2 per cent higher while ABB gained a per cent. BHEL closed more than 0.5 per cent higher.

HDFC Bank recovered from its recent losses and closed 1.5 per cent higher.

Reliance Energy and Zee Tele were the other gainers from the index stocks.

Sensex closed at 9311, a loss of 63 points, and the Nifty at 2833, lower by 17 points. Nifty January futures closed at a discount of 9 points to the spot index.

Reliance Industries, Infosys and Educomp were the three most active stocks on the NSE in terms of traded value.

Crude oil is trading below $54 per barrel, marginally lower than Friday's close, in early European trades today.

Bajaj Auto has reported consolidated revenues of Rs2,080.82 crore for the December quarter as compared to Rs1,708.51 crore for the prior year quarter. Net profits for the quarter were at Rs253.98, adjusted for non-recurring expenses, as compared to Rs191.73 crore - an increase of 62.2 per cent.

Reports suggest that Sun Pharma is eyeing more acquisitions in the US. The company is reportedly willing to spend up to $450 million on one or more acquisitions in the generic pharma space. The company has not confirmed these reports. Sun had acquired the assets of a US drug company late last year for over $20 million.

Hindalco has informed the exchanges that the company's bid to acquire the rolled products and conducting rod-manufacturing assets of Pennar Aluminium has been accepted. The assets, estimated to have a residual life of more than 10 years, were put on the block to recover the dues of Pennar.

PNB said it has received permission from the RBI to start operations in four overseas locations. The bank would set up a subsidiary each in UK and Canada, besides a branch in Hong Kong and an offshore banking unit in Singapore.

Mid-Cap Action

Mid-caps also slipped today, unable to hold on to their gains from Friday. Select sectors like sugar continued to find good buying interest. The CNX Mid-Cap index lost 24 points and closed the day at 4188.

Farallon Capital would invest an additional Rs200 crore in two subsidiary companies of IndiaBulls Financial Services. The US based investment company would take a 33.3 per cent stake in IndiaBulls Housing Finance for Rs112.5 crore. IndiaBulls Financial would retain the balance stake and would remain the majority shareholder.

IndiaBulls Financial would make a further investment of Rs178 crore in its retail finance subsidiary, IndiaBulls Credit Services, to increase the stake to over 55 per cent. Farallon would invest Rs89 crore in IndiaBulls Credit to maintain its stake at 33.3 per cent. Last year, Farallon had invested in IndiaBulls Credit and a real estate company promoted by IndiaBulls.

IndiaBulls was one of the best performers in the mid-cap space, closing more than 8 per cent higher.

Andhra Bank has fixed the price band of its follow-on public issue at Rs82 to Rs90 per share, a discount of more than 10 per cent from the current market price at the upper end of the band. The issue would remain open from Jan.16 to Jan. 20.