FMCG on a drive down

STOCKS REPORT

Select metal and technology stocks were in the limelight on Monday even as the benchmark Bombay Stock Exchange (BSE) Sensex closed lower on profit booking.

Investors sold FMCG, banking and oil counters, which were among the biggest losers on Monday. In the BSE Sensex basket, 24 out of the 30 scrips closed lower. The breadth of the market was negative, with losers outpacing gainers 5:3.

A dealer from Motilal Oswal Securities said that profit taking was seen on Monday, extending losses from Friday. "Some institutional activity is being seen but most of the players are nervous at these higher levels and waiting for fresh impetus before taking new calls."

However, the undertone of the market is positive on the back of strong liquidity in the market. Brokers said that metal counters were in the focus on expected strong demand and higher price realisations.

The BSE Sensex hit a high of 6882.23 and a low of 6794.92 in intra-day trades, before closing at 6810.04, down 43.69 points (0.64 per cent) from Friday's close. Volumes were higher than on Friday in the cash segment of the bourses; the BSE reported a turnover of Rs 5,603.63 crore and the NSE reported a turnover of Rs 6,174.97 crore. Volumes were higher because of a huge block deal in the Bharti Tele-Ventures counter and also because of the Jet Airways debut on the bourses.

The Hero Honda scrip was the biggest gainer in the Sensex basket, rising 1.89 per cent to close at Rs 575.05, followed by Hindalco, up 1.46 per cent to Rs 1,446.80, Tata Motors gained 0.71 per cent to Rs 465.05, Infosys Technologies was up 0.58 per cent to Rs 2,227.40 and L&T gained 0.37 per cent to Rs 1,096.85.

HLL was the biggest loser in the Sensex basket, falling 3.28 per cent to close at Rs 138.60, Cipla was down 1.75 per cent to Rs 275.10, Reliance Energy was down 1.68 per cent to Rs 566.45, Gujarat Ambuja Cement fell 1.66 per cent to Rs 429.30 and Reliance Industries was down 1.57 per cent to Rs 578.45.

Strong buying support from foreign funds in the last few sessions has helped the market record strong rally but the undertone of the market appeared cautious, brokers said.

A lack of active domestic participation has also raised concerns among market players, they added. Foreign institutional investors were net buyers of Indian shares worth Rs 125.80 crore on Friday as per data from the Securities and Exchange Board of India website.

Brokers said that the mood in the market appeared cautious at these levels. Most of the major indices are trading near their lifetime highs and some players said that despite high liquidity, the market is overbought. Moreover, fiscal year end pressures will lead to liquidation of positions built on margin funding, brokers said.

"Some unwinding in leveraged positions is being seen and will increase towards the end of the month," a dealer from a local brokerage said. Going forward, select profit taking is expected, analysts said.