Date:20/01/2005 URL: http://www.thehindubusinessline.com/2005/01/20/stories/2005012002151500.htm

Back Select mid-caps gain; Bajaj Auto skids

B. Krishnakumar

THE key market indices ended on a weak note for the second day in succession. After ruling firm in the early part of the day, the trend turned weak in the last hour of the trading session. After hitting a high of 6230.62, the BSE Sensex closed at 6173.32, down 19.03 points from Tuesday's close of 6192.35. The S&P CNX Nifty ended the day at 1926.65, after having touched a high of 1945.65. This represents a drop of 0.38 per cent over previous day's close of 1934.05.

Bajaj Auto, Satyam Computer, ITC and Ranbaxy Laboratories were prominent losers amongst the stocks that form part of the index. The Bajaj Auto stock took a pounding on Wednesday after it announced a relatively lacklustre earnings performance for the quarter ended December 2004.

The share price of Bajaj Auto dropped by about 6 per cent or Rs 61.95 to close at Rs 1,021.65.

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The share price of Ranbaxy Laboratories suffered a similar fate after having reported a subdued trend in earnings growth for the year ended December 2004. The stock has been on a sharp downtrend in past few days. This trend was extended to Wednesday's trading as well. The share price ended the day at Rs 999.05, down Rs 13.45 from the previous day's close.

The likes of Hero Honda, Cipla, Reliance Industries and Tata Steel were the handful of gainers amongst the index stocks. Helped by improved performance, the share price of Cipla closed at Rs 266.4, up Rs 5.15 from Tuesday's close. The Tata Steel stock recorded a gain of Rs 4.45 before ending the day at Rs 348.4.

Despite the dull trading environment that prevailed during the day, buying interest was evident in select mid-cap stocks. Companies such as Deccan Chronicle, Alembic, Sesa Goa and Sonata Software were the prominent gainers of the day.

The Sonata Software counter was buzzing with activity on reports that the company has entered into a strategic alliance with Microsoft. This, coupled with the improved financial performance for the quarter ended December 2004, has acted as major positive triggers for the stock. It ended the day at Rs 22.75, up by about 13 per cent. Trading volumes zipped to 11.5 lakh shares from 1.2 lakh shares.

The recently listed Deccan Chronicle stock rose by 8 per cent to Rs 137. Trading volume spurted to 4.7 lakh shares from 20,559 shares recorded the previous day. The rise in share price appears to have been triggered by the improved performance reported by the company for the quarter ended December 2004.

The post-tax earnings almost doubled to Rs 11.3 crore while the turnover increased by about 44 per cent to Rs 45.78 crore.

A sharp pick-up in trading volume was evident in counters such as Sesa Goa, Alembic, BOC and Saw Pipes. The pick-up in trading volume was accompanied by a rise in share price as well. In the case of Sesa Goa, the share price rose to Rs 1,066.25 from Rs 1,016.45 while trading volumes more than doubled to 3.4 lakh shares from 1.2 lakh shares.

After a steady fall in the past few weeks, Mcdowell has attracted buying interest in the last couple of days. The stock has gained about 24 per cent in the last three trading sessions. The share price closed at Rs 127.7 on Wednesday, up by 2.4 per cent over previous day's close. Trading volume was quite heavy at 32 lakh shares in comparison to 20 lakh shares on Tuesday.

There appears to be no respite to the recent fall in the share price of Ranbaxy and Aurobindo Pharma. Both the stocks have been on a downtrend for a while now and this trend persisted on Wednesday as well. The share price of Aurobindo Pharma declined by 2.8 per cent to close at Rs 283.7. The stock has dropped by about 14 per cent this month.