Alagappan Arunachalam

THE mood in the market, on Thursday, was cautious. Reflecting the trend on the major Asian markets, the markets closed lower. Driven by concerns of a slowdown in investments by overseas investors in the market, investors chose to sell in frontline stocks.

FIIs have slowed their investments as compared to those made in early March. Small value stocks were on the extremes, while some of them recorded sharp gains of more than 20 per cent, a number of them lost more than 19 per cent. The advances-decline ratio of about 1:1 was equally spread across sectors and categories. However, the declines outnumbered the advances in the frontline stocks.

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The BSE Sensex opened marginally higher by 13 points and was rangebound till the post-lunch session. The index lost sharply in the closing hours. The Sensex closed lower by 60.77 points at 6545.64 closer to Tuesday's levels.

The S&P CNX Nifty moved in a similar fashion, it moved within a narrow band of 19 points, it touched an intra-day high of 2084.9 in the initial minutes of the trading session. The index took a deep dive into the red in the closing hours of trade, to record a loss of 0.79 per cent.

Led by ICICI Bank, Infosys, ONGC and Reliance Industries the bellwether indices lost the gains recorded on Wednesday. Mid-cap stocks Union Bank of India, Ingersoll Rand, Kochi Refineries and Bongaigaon Refinery were the major gainers. The mid-cap-oriented index on the NSE gained marginally by less than 0.1 per cent.

Prompted by reports of an expected rise in overseas investors holdings limits in state-owned banks from 20 to 24 per cent, investors took keen interest in the shares of these banks. High trading activity took place on the counters of these stocks; major gainers were UCO Bank, Indian Overseas Bank, Oriental Bank of Commerce and Bank of Baroda. Andhra Bank closed at Rs 108.85, recording a gain of 1.49 per cent.

Frontline pharma stocks Cadila Health Care, Cipla, Divi's Lab, and Lupin closed lower, Nicholas Piramal recorded a sharp fall of 3.63 per cent, after the company had announced of a drop in sales for the quarter ended March 31, due to lower off take by dealers on concerns over VAT.

Steel stocks continued to remain in the limelight, however the sparkle appears to have faded in them. Led by Tata Steel, SAIL, Essar Steel and Ispat Industries other steel stocks closed lower. Sesa Goa, Jindal Steel and Man Industries were the major losers. Hedge funds appear to be content with investing in the commodities market with steel prices skyrocketing in the recent months.

IVRCL Infrastructure shot up by 5.74 per cent to close at Rs 445.4 after a block deal of 14 lakh shares were reported at Rs 450. Gammon India and Mahindra Geaco Developers were the other prominent construction stocks that lost value.

Arvind Mills gained 2.59 per cent per cent amid announcements by the company of an expected 41 per cent rise in sales for its unit Arvind Brands in fiscal 2006. Supported by buying interest the stock closed at Rs 122.80.

Alstom froze at Rs 91.05 despite the lower price in the open offer Rs 75 announced by Areva group after the French group had reached an agreement to acquire up to a 66.35 per cent stake in the former.

Rajesh Exports, on reports of the company having bagged an order worth Rs 126 crore from a Kuwait, closed higher by nearly one per cent at Rs 683.7.

Significant Nifty gainers were ABB, Colgate, HDFC Bank, Dabur, Wipro and Hero Honda Motors.

Prominent losers among the Nifty constituents were Bajaj Auto, Bharat Heavy Electricals, Larsen & Toubro, Shipping Corporation of India and Tata Power.

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