Indices decline on profit booking

14 February 2006

After the strong gains of the previous week and holding firm yesterday, the indices finally came under selling pressure today. Most of the frontline stocks which had seen good appreciation in recent days saw profit booking.

After a weak start, most Asian markets recovered strongly later in the day. The Japanese Nikkei added nearly 2 per cent after the heavy losses of last couple of weeks.

The markets opened the day with marginal gains. The Sensex recorded a new lifetime intra-day high of 10185 early in the day while the Nifty saw a new high of 3052.

Both indices came under pressure soon after opening. They drifted down till early in the afternoon before recovering and testing the highs of the day. Another bout of selling pulled down the indices and at one point Sensex was trading with losses of more than a per cent.

Nalco came under heavy pressure after the prices of aluminium declined in the international market. The stock closed with losses of nearly 6 per cent. Hindalco lost nearly 2.5 per cent.

L&T came under pressure after 2 days of good gains and closed with losses of nearly 4 per cent.

Cipla, another major gainer from last week, gave up 4.5 per cent.
Tata Power and Tata Motors declined by over 3 per cent each. Technology stocks Wipro and Satyam also gave up nearly 3 per cent each.

Dr. Reddy's and Tata Steel were the other major losers.

HLL was the star of the day after the company announced excellent results for the December quarter. After a subdued opening, the stock surged after the results were announced and finally closed with gains of more than 7 per cent.

Bajaj Auto saw a sharp spurt today and closed with gains of more than 3.5 per cent. M&M added nearly 2 per cent.

Bharti, Gail and Tata Tea were the other gainers.

Sensex closed at 10086, a decline of 87 points, and the Nifty at 3018, lower by 24 points. Nifty February futures closed at a discount of 7 points to the spot index.

US markets declined yesterday as worries about continued interest rate hikes by the US Fed are still affecting sentiments. The new chairman of the US Fed is scheduled to testify before the US Congress this week. Technology stocks were affected by another sharp decline in Google.

The Dow closed with losses of one-quarter of a per cent while S&P 500 lost one-third of a per cent. The NASDAQ index lost nearly a per cent.

Crude prices declined further yesterday despite the continuing tensions between Iran and western countries. Even the heavy winter conditions across most US cities did not have much impact on oil prices yesterday as funds continued to book profits on worries of higher US stocks. March NYMEX futures are trading below $61 per barrel in early European trades today.

Hindustan Lever reported a net profit of Rs520.86 crore for the December quarter as compared to Rs333.67 crore for the previous year quarter. Total revenues for the quarter increased to Rs3,038.53 crore from Rs2,692.38 crore.

For the full year 2005, HLL's consolidated profits were at Rs1,355.92 crore as compared to Rs1,208.4 crore for the previous year. Consolidated revenues for the year were at Rs11,879.2 crore as compared to Rs10,901.81 crore for the previous year.

ICICI Bank has increased its benchmark lending rate by 25 basis points to 11.75 per cent per annum with effect from today.

Pharma company Wockardt has reported a consolidated net profit of Rs257.1 crore for the full year 2005 as compared to Rs213.5 crore for the previous year. Total revenues increased to Rs1,430.1 crore as compared to Rs1,267.4 crore.

The board of Wockardt has approved plans to raise up to $500 million from an overseas issue of equity or equity related instruments.

VSNL has completed the acquisition of international telecom services provider Teleglobe. The company paid $239 million for the acquisition. Operations of Teleglobe would be integrated with that of VSNL International.

Canara Bank has denied media reports that it is planning to acquire smaller banks in the northern parts of the country.

The board of M&M has approved plans to raise up to $200 million from an overseas debt issue.

Mid-Cap Action

Mid-caps held firm in early trades, but gave up later in the day. Broad profit booking was seen in the smaller stocks as the market breadth turned negative in the afternoon. The CNX Mid-Cap index lost 20 points to end the day at 4439.

The board of Indian Overseas Bank has approved the proposal to buy out other promoters in Chennai based Bharat Overseas Bank. IOB already owns 30 per cent of Bharat Overseas while a clutch of other banks like ING Vysya, Federal Bank, Karnataka Bank etc owns the rest. The acquisition would cost IOB around Rs170 crore.