Date:30/08/2005 URL: http://www.thehindubusinessline.com/2005/08/30/stories/2005083002591500.htm

Back Small-cap stocks shine amid weak condition

Vidya Bala

MARKETS closed in the red after managing to partially recoup the losses made in the early part of the session.

After opening on a weak note, heavy profit-booking pushed the Sensex to an intra-day low of 7566.2. It later recovered lost ground and reached the day's high of 7699.5. The confidence was short-lived as the markets moved deeper into the red and forced the Sensex to close at 7634.4 — a decline of 46 points or 0.6 per cent. In the broader markets, the S&P CNX Nifty closed at 2337.65, a decline of 19.4 points or 0.8 per cent.

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The markets moved in line with the sentiments across Asia. A slide in the US consumer confidence index and crude oil price breaching the $70 per barrel mark may have contributed to the gloomy sentiments in the domestic market.

All-round profit-booking across various sectors did not deter the small-cap stocks from having a field day. The BSE small-cap index was up 1.37 per cent. Banking stocks were heavily hit as BSE Bankex was down 1.1 per cent.

In the basket of BSE-30 (Sensex) Bharti Televentures made reasonable gains of 2 per cent followed by Hindalco, HDFC Bank and Larsen & Toubro. Cipla, BHEL, Dr Reddy's Lab and HDFC succumbed to selling pressures.

Penny stocks were in the limelight for bucking the market trend. GMR Industries saw a gain of 20 per cent to close at Rs 145.8, while Mascon Global and Flex Industries gained by 17 per cent and 14 per cent respectively.

Oil and gas stocks bore the brunt of attack from the bears. Record high global crude prices added to the negative sentiment in the sector. BPCL, HPCL, Chennai Petroleum and Essar Oil were some of the major losers. Mangalore Refineries, BOC India and Hindustan Oil Exploration however managed to close with marginal gains.

Spirits ran high in the liquor segment. United Breweries rose by 12 per cent to Rs 610 even as Shaw Wallace and McDowell surged by 6 per cent and 3 per cent respectively.

Gems and jewellery stocks also sparkled during the day. Suashish Diamonds gained 8 per cent to close at Rs 96. Classic Diamonds and Su-raj Diamonds gained in the 4-6 per cent range. Vaibhav Gems and Titan failed to follow suit and ended in the red.

News of cement prices firming up saw Prism Cements and India Cements gain ground, while Associated Cement Company stayed out of the rally.

Media space saw heightened interest in the stocks of Deccan Chronicle. The stock gained 15 per cent to close at Rs 344.8. The company will discuss on plans to expand and raise funds in its board meeting. Pentamedia Graphics, Balaji Telefilms and Zee Telefilms also closed in the green, while Television 18 India and Crest Animation ended on a weak note.

Union Bank of India reversed the negative trend in the banking space and made smart gains of 6 per cent. Bank of India, Canara Bank, ICICI Bank and Kotak Mahindra Bank witnessed profit-taking.

Stock-specific action

IT company GTL rose 16 per cent to Rs 1,14.9. The company plans to come up with a reorganisation plan at its board meeting.

Great Eastern Shipping gained Rs 12 to Rs 181.3 after reports that its off-shore business may be split into another company.

Infrastructure player Subhash Projects surged by 5 per cent to Rs 95.7. The company won an order worth Rs 50 crore to set up an effluent pumping station in New Delhi.

Colour-Chem - a unit of Clariant AG added Rs 18.7 to Rs 287.5. The company's board approved plan to merge all group companies in India.

Prominent gainers among the Nifty constituents include IPCL, ABB, MTNL and CMC, while HCL Technologies, Corporation Bank and Jaiprakash Associates were conspicuous losers.