Date:18/01/2006 URL: http://www.thehindubusinessline.com/2006/01/18/stories/2006011802521500.htm

Back Stocks suffer decline for 6th consecutive day

Suresh Krishnamurthy

SENTIMENT continued to remain negative on the bourses with stocks suffering losses for the sixth straight day. Sensex remained barely unchanged despite a 6 per cent gain in the stock of Reliance Industries as only 4 out of the Sensex stocks notched gains. All other indices including Nifty registered losses.

At NSE, the downward trend in stock prices was accompanied by an upsurge in trading volumes. Trading volumes crossed Rs 9,000 crore for only the second time since October.

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Amongst sectoral indices, BSE Oil & Gas and BSE Consumer Durables were the only indices to stay in positive territory. This too was however not representative of a broad based rally in these sectors. Amongst the 8 stocks in Oil & Gas Index, only Reliance recorded gains. In Consumer Durables Index, only Videocon and Blue Star from among the seven stocks gained.

Prominent losers included newly listed stocks such as Educomp Solutions, Bartronics India and Everest Kanto. The stock of Liberty Shoes lost 6 per cent despite the company's announcement that it is expanding capacity and evaluating options for restructuring. PVR Cinemas, another newly listed stock, also found good news being ignored by the markets. The company has announced that the cut in entertainment tax in Haryana will add to profits. The stock was however down 3 per cent.

Companies that announced a decline in profits such as Rallis India and HMT also figured in the loser's list. The stock of Rallis was down by 10 per cent. The stock of Procter & Gamble was also down in the wake of the announcement that there will be no merger with Gillette India.

Stocks that gained include TCS, Rajshree Sugars, Federal Bank, SSI and Sanghi Industries. The rise in stock price of SSI and Sanghi Industries need to be seen in the backdrop of preferential allotments to foreign institutional investors. TCS announced the formation of a joint venture with Madhya Pradesh Government for addressing e-governance initiatives. The stock of Rajshree Sugars rose 6 per cent with the company announcing that its co-generation power plant will now be eligible to receive credits for carbon emission rights.