Date:16/05/2006 URL: http://www.thehindubusinessline.com/2006/05/16/stories/2006051604991500.htm

Back Bears continue to haunt markets

Vidya Bala

Trading highlights
Declining stocks outnumber advances by 4.5 times
Metals stocks decline on fall in LME prices
Real estate stocks hold firm

The bears continued to haunt the markets, taking-off from the final session of last week, with renewed vigour. Indices across sectors crumbled like ninepins and closed in the red.

Declining stocks outnumbered the advances in the ratio of 4.5:1, reflecting the extent of the selling pressure witnessed in the market on Monday.

Several factors appear to have triggered the fall. Crash in metal prices on the London Metal Exchange, the tussle between the Government and cement companies on the issue of high cement prices and the weakness across global markets were some of them.

Click here for table

Confidence of overseas investors was tepid as showcased by net buying of Rs 18.6 crore on May 12. Concerns of the USFederal Reserve raising interest rates dampened the spirits across global markets.

Buzzing stocks

Despite the blood bath, select stocks made a mark with gains that attracted attention. Unitech continued its upward march and hit the upper circuit again. Jai Corporation, Adani Exports and Godrej Industries also closed in the upper limit. Nagarjuna Construction made a smart gain of 5 per cent to Rs 377.6. The company plans to offer bonus shares, to be decided on May 29. Lupin gained Rs 16.6 to Rs 1,196.6. The company will sell will sell ItalFarmco SA's sodium injections used to treat heart diseases.

Sector focus

The BSE Metal index saw a free fall to the tune of 10.7 per cent on the back of cooling metal prices on the LME. Hindalco was among the biggest losers with a 13.5 per cent decline. Tata Steel, Bhushan Steel and Tata Metaliks lost in the range of 6-8 per cent.

Cement stocks continued to witness profit booking. Frontline players Associated Cement Company, Gujarat Ambuja Cement and Grasim Industries lost 4-5 per cent.

Real estate stocks were, however, unperturbed by the day's happenings. Mahindra Gesco Developers, Ansal Properties & Infrastructure and Ansal Housing & Construction continued their northbound journey.

The capital goods space also took a rude jolt. Bharat Electronics, Alstom Projects, Siemens, ABB and Larsen & Toubro succumbed to selling pressure.

Stock-specific action

Zuari Industries sold a 50 per cent stake in Zuari Cement to Italcementi of Italy for Rs.600 crore. The company's share fell 9.7 per cent to Rs.295.7.

Suzlon Energy's profits for the year ended March 2006 jumped 127 per cent on the back of increased orders in domestic and overseas territories. The company also plans to raise additional funds through FCCBs or foreign depository receipts. The stock, however, closed on a weak note.

Kotak Mahindra Bank and Allahabad Bank also announced strong results towards the close of session. The market however did not react positively to the numbers.

Post-trading session, Wipro announced acquisition of a mechanical design services firm Quantech Global Services, with units in India and the US.

Trent, Sundaram Clayton, Finloex Cables, Karur Vysya Bank and Jindal Drilling & Industries were stocks among the Nifty constituents that bucked the declining trend and closed in the green. SKF, Sesa Goa, Gujarat Alkalies & Chemicals, Dabur India and Eicher Motors were among the heavy losers' list.