A spell of consolidation

STOCKS REPORT

Consolidation in the market led to the market closing a shade lower with the BSE Sensex ending at 5,936.96 down by 12.82 points (0.22 per cent).

The index opened at 5,973.71, and went to a high of 5,986.41 while the low for the day was 5,886.98. The NSE Nifty index closed at 1,885.30, down by 6.20 points (0.33 per cent).

Dealers said that the market was due for a correction after the recent gains. The index had gained by 4 per cent over the last four trading sessions.

The market was in a mixed mode. There were certain stocks which were witnessing profit taking while other stocks were being bought. Auto, power, telecom and oil stocks were up while cement, steel and information technology stocks fell.

Hanu Bhatia, dealer at Prag Parikh Securities, said, "this correction is part of the consolidation taking place in the market. We expect fund inflows to continue and the market will rise."

Market participants said that there was not much of retail participation and this was the reason for low volumes while the market was generally lacklustre.

Though foreign funds are still buying, retail investors are preferring to keep away from the market for the time being. Analysts explained that retail investors are preferring to keep their funds free for the large number of public offerings which are around the corner.

However, there is considerable optimism in the market still that the index will go higher.

The undertone in the market was negative with losers outpacing gainers by 902 to 848. Volume was relatively thin at 13.5 crore shares, but still above Wednesday's 11.8 crore shares.

Cement companies were mostly down after recent gains, with market leader Associated Cement Companies dropping 2.1 per cent to close at Rs 269.40 while Grasim Industries fell two per cent to Rs 1,131.65.

Steel stocks fell though there were expectations of firm prices. Steel Authority of India was down 1.3 per cent to Rs 44.10 while Tata Steel slipped nearly one per cent to Rs 427.05.

Oil stocks maintained their uptrend with Mangalore Refinery and Petrochemicals up 2.6 per cent to Rs 58.55 and HPCL gaining 2.7 per cent to close at Rs 477.60.

Among auto stocks, Hero Honda gained 4.6 per cent to close at Rs 505 while Maruti rose 1.5 per cent to Rs 481.45 at the end of the day.

Technology stocks were also weak. Index heavyweight Infosys closed down 2.1 per cent at Rs 5,354.05 while Wipro was also down 1.8 per cent at Rs 1,580.05. Both stocks were down on selling pressure.

Banking stocks showed a mixed trend. The largest bank, State Bank of India ended down 1.5 per cent at Rs 617.80. There was selling pressure in bank stocks, dealers said.

Among the pharma companies, shares of Wockhardt and Alembic rallied on announcement of bonus issues. Wockhardt rose 11.8 per cent to Rs 894.30 on a bonus issue of one for every two shares. Alembic hit the 20 per cent upper circuit at Rs 408.60 after its board approved a two-for-one bonus issue.