The Hindu : Business : Fag-end sell-off drags Sensex down

Online edition of India's National Newspaper
Monday, Oct 25, 2004

Business

Business

Fag-end sell-off drags Sensex down

DESPITE ENCOURAGING performance by major corporates, investors resorted to profit-taking in major blue chip companies at the fag-end of last week, which resulted in the Bombay Stock Exchange sensitive index moving below the 5,700 level. Selling across the board led to weakness in old economy stocks. Index heavyweights slipped and closed with considerable losses.

Till midweek, prices were ruling firm. Sectors such as IT, petro, auto and public sector undertakings had good buying support. But rising crude oil prices affected market sentiment from thereon as operators reduced their positions and preferred to wait for stability in crude prices.

The extended weekend holidays due to Dussehra was another contributory factor for the subdued sentiment. Baring Tuesday, which witnessed a gain of 58 points, the week witnessed sustained selling pressure. While foreign institutional investors (FIIs) continued their buying spree, mutual funds and investors were keen on profit-taking. FIIs recoded net purchases of Rs. 220.70 crores in equities while mutual funds sold shares worth Rs. 123 crores during the week under reference.

The 30-scrip index opened the week better at 5706.83 against the previous weekend close of 5686.73 and rose further to a high of 5751.60. But it fell sharply and after touching an intra-week low of 5617.37, ended at 5641.06, showing a net loss of 45.67 points. The BSE-100 declined by 21.87 points to 3018.52.

The week witnessed high volatility in the blue chip counters. Index-based stocks such as Bajaj Auto, Cipla, Grasim, Hindalco, HPCL, Infosys Technologies, ITC, Larsen and Toubro, Satyam Computer, Wipro, State Bank of India, ACC, Bharti TeleVentures, Dr. Reddy's, Hindustan Lever, Maruti, ONGC, Ranbaxy, Reliance, Reliance Energy, Tata Steel and Zee Tele were the major losers.

On the other hand, Bharat Forge, ABB, Britannia, Chennai Petroleum, CMC, Corporation Bank, Gujarat Gas, Hexaware, IPCA Lab, MICO, Nicholas Labs, Novartis, Raymond, Siemens and Sun Pharma attracted good support and closed strong.

The total turnover on Monday was at Rs. 1,342.36 crores and moved up to Rs. 1,701.07 crores by Wednesday. Later it declined to Rs. 1,551.94 crores against the previous weekend close of Rs. 1,580.81 crores.

On the National Stock Exchange (NSE), the S&P CNX Nifty opened on a subdued note at 1786 and after moving up to 1813.90, declined to a low of 1772.40 before closing at 1779.75.

In result driven activity, Satyam attracted profit booking following the declaration of its quarterly results. With no change in offshore mix, sales grew 10 per cent and the net profit rose 8.7 per cent on quarter to quarter.

Gujarat Ambuja inched up after the company's net profit zoomed. It reported a growth of 60 per cent in revenues for the quarter ended September 30, 2004.

ACC also managed to end in the positive territory in an otherwise weak market.

In news driven activity, Pritish Nandy Communications firmed up on reports that the company's board had approved an increase in the investment ceiling for FIIs from 24 per cent to 60 per cent of its equity capital.

This week major companies such as Reliance, Tata Steel, Tata Power, Tata Tea, L&T, UltraTech Cemco, ACC, Maruti Udyog, Mahindra and Mahindra, Ashok Leyland, Dr. Reddys' Lab, Glenmark, ONGC, HPCL, BPCL, BHEL, VSNL, National Aluminium, GAIL, SAIL, PTC, Grasim, Hindalco, State Bank of India, Canara Bank, Bank of Baroda, Punjab National Bank and Oriental Bank will be announcing their quarterly results.

As the settlement of October Futures and Options falls this week, the market should remain volatile to some extent. Some stock specific movements should be there depending on the results.

Rupee at 3-month high

The Indian currency climbed to a three-month peak against the U.S. currency on the foreign exchange market last week, driven-up by strong trade and foreign portfolio investment inflows, despite spiralling world oil prices.

The domestic unit ended at 45.73/74 a dollar, a steep 12-1/2 paise rise from the previous weekend finish of 45.8550/8650 amidst a distinctly weak dollar overseas. The market remained closed on Friday for `Dussehra'. The anticipation of more foreign money inflow as part of the subscriptions to the National Thermal Power Corporation issue is likely to strengthen the rupee further this week.

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