Course correction

STOCKS REPORT

The stock markets fell on Friday led by banking and tech stocks mainly because of profit booking after sustained rise for past few days.

The BSE Sensex fell 73.90 points to close at 6,346.48, after the record high witnessed on the previous day. Dealers said that investors were offloading for a fresh round of buying.

The index has so far gained 1.8 per cent during the week. The broader National Stock Exchange (NSE) 50-share index fell 21.10 points down to 2,012.10 while its 200 share mid-cap index rose 0.2 per cent.

There is also a lot of optimism in the market on expectations of good corporate earnings for the third quarter, analysts said, which overrides the concerns over high valuations.

There is some uncertainty and nervousness in the market over the unusually high levels as retail investors and some banks are preferring to book profits ahead of the holiday season.

Analysts said that trading would be range-bound till the end of the month. However, the broad market momentum remained negative, with losers outstripping gainers by 1,245 to 798 on the BSE. Volumes rose to 23.2 crore shares from 22.3 crore on Thursday.

With the large caps fully priced at the current levels, mid-cap stocks are in the limelight. The NSE mid-cap index has risen 35 per cent in 2004 against an 8.7 per cent rise in the Sensex.

Pharma scrip Cipla rose 1.6 per cent, Lupin gained 1.3 per cent and Aventis Pharma rose 7.5 per cent. Nicholas Piramal rose 4.2 per cent after it said that it had acquired French Rhodia Organique Fine's global inhalation anaesthetics business for $14 million.

Banks, which have gained recently on expectations their earnings would rise on increased lending, fell on profit taking. State Bank of India and ICICI Bank were down 0.7 per cent and 1.5 per cent, respectively.

Their combined weight is around 11 per cent in the Sensex. UTI Bank fell 4.4 per cent on market talks that it could be involved in a three-way merger with IDBI Bank.

But ING Vysya Bank and Karnataka Bank rose 20 per cent each. Both have announced rights issue at rates well below their market prices.

Software shares extended losses after opening lower, tracking a weak Nasdaq close. Infosys Technologies, Wipro and Satyam Computer Services ended 1.4 per cent, 1.4 per cent and 1.7 per cent lower. They have a total weight of over 18 per cent in the Sensex.

Reliance Industries fell 2.1 per cent on worries about the ongoing spat between the Ambani brothers. It has a 10 per cent weight in the BSE Sensex.

Group company Reliance Energy rose 1 per cent after it extended by 90 days to March 17, 2005 a scheme to buy shares back from shareholders.