Date:03/02/2005 URL: http://www.thehindubusinessline.com/2005/02/03/stories/2005020302291500.htm

Back Reliance, HLL drag Sensex; telecoms shine

B. Krishnakumar

THE market activity was lacklustre during Wednesday's trading. The benchmark indices closed on a weak note for the second day in a row.

Market participants appear to have treaded the path of caution ahead of the US Federal Reserve's meeting to consider revision of interest rates.

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The BSE Sensex opened at 6560.62 and went on to touch a high of 6600.17 during the early part of the trading session. The sentiment turned weak subsequently and the index dropped to a low of 6510.42 before ending the day at 6530.06. This represents a decline of 22.41 points over the previous day's close of 6507.65.

The S&P CNX Nifty closed lower by 7.6 points at 2052.25. The drop in share price of companies such as Reliance Industries, Hindustan Lever, ITC and Ranbaxy pushed the indices into the red. After a smart recovery in the past few weeks, the share price of Hindustan Lever dropped Rs 4.25 or 2.5 per cent to close at Rs 164.55.

Top gainers amongst index stocks included companies such as Grasim, Tata Power, BHEL and ICICI Bank. The share price of state owned power equipment major BHEL recorded Rs 30.2 gain to close at Rs 787.55.

The Government's clearance of the hike in FDI investment in telecom sector to 74 per cent from 49 per cent was a major development during the day. This attracted market attention towards telecom sector stocks such as Tata Teleservices and Bharti Tele.

While the share price of Tata Teleservices gained during the day, the Bharti Tele stock closed weak, having however recovered off the day's low. Trading volume in both these counters saw a huge jump on Wednesday. In the case of Tata Teleservices, close to 3.2 crore shares changed hands during the day as opposed to 38 lakh shares traded the previous day.

From about 11 lakh shares recorded on Tuesday, trading volume in Bharti Tele shot up to 7.4 crore shares on Wednesday.

There were block deals for 6.27 crore shares at an average rate of about Rs 216 per share. According to the bulk deal statistics available in the BSE Web site, Morgan Stanley Company International has picked up 2.07 crore shares at Rs 216. The stock closed on a weak note at Rs 219.05 in comparison to Tuesday's close of Rs 222.35.

Market action continued to be centred on mid-cap stocks. Companies such as Crompton Greaves, BOC, Gujarat Gas and Balrampur Chini were prominent amongst the gainers. The share price of Crompton Greaves logged a 9.2 per cent gain to close at Rs 324.65. Trading volumes, however, ebbed to 1.32 lakh shares from 1.58 lakh shares.

The Balrampur Chini stock moved up Rs 35.75 to settle at Rs 641.6. Trading volumes, however, dropped to 1.2 lakh shares from 1.7 lakh shares. Along with Balrampur Chini, Dhampur Sugar was another stock from the sugar industry to have registered sharp gain on Wednesday. The share price of Dhampur Sugar closed at Rs 157.15, up Rs 14.25 over previous day's close.

A sharp increase in trading volume was evident in stocks such as Gujarat Alkalies, Jyoti Structures, Royal Airways and Sesa Goa. The Jyoti Structures stock moved up by 11 per cent to Rs.155.45 while trading volumes spurted to 3.97 lakh shares from 56146 shares.

Texmaco's share price increased by 10 per cent on Wednesday on reports that the company has bagged orders worth Rs 70 crore for the supply of boilers and wagons. The stock closed at Rs.254.3; trading volumes more than doubled to 43,704 shares from 20,177 shares.

The list of losers' includes Alembic, Berger Paints, Glenmark Pharma and Bajaj Hindustan. Taking into account the sharp rise registered by these stocks, the weakness on Wednesday could be on account of profit-bookings.

The share price of Alembic declined by 2.1 per cent to Rs.316.35. The drop was on the back of reduced trading volume of 54252 shares as against 1.4 lakh shares on Tuesday.