Volumes dry up

STOCKS REPORT

Trading in the stock markets remained dull on thin volumes as traders sat on the sidelines ahead of the Union Budget.

The Bombay Stock Exchange (BSE) Sensex shed 2.76 points to settle at 4,735.86, while the S&P CNX Nifty index fell 7.30 points to end at 1,474.70.

Declining shares outnumbered gainers by nearly two to one. Gains by metal, cement, telecom and software firms were offset by losses in oil and pharmaceutical firms and banks.

"Until the Budget there are no triggers to encourage buying, and while there may be some sector-specific movement on expectation of benefits, investors will prefer to wait," said a dealer with an institutional brokerage house.

State-run oil exploration major the Oil and Natural Gas Corporation fell 3.33 per cent to close at Rs 622. The stock had hit the day's low of Rs 608.10, after its full-year profit fell nearly 18 per cent squeezed by subsidies for state-run refiners to offset high global crude prices.

The share price of Hindustan Petroleum Corporation slipped 2.40 per cent to Rs 322.25.

Drug firms were hit by sector downgrades by a major foreign brokerage house, citing increasing competition and margins pressure in the generics business.

Cipla fell 4.83 per cent to Rs 197.25 on selling continued on the counter.

Dr Reddy's Laboratories slipped 0.27 per cent to Rs 731.60, off the day's low of Rs 718. Ranbaxy Laboratories rose 0.02 per cent to close at Rs 878.15, off its day's high of Rs 898.40.

Meanwhile, banking stocks slipped further on fears that interest rates would harden as inflation rises, leading to lower treasury profits.

ICICI Bank, the second largest commercial bank, fell 1.30 per cent to Rs 252.60 and private-sector UTI Bank slipped four per cent to Rs 119.65.

State-run Punjab National Bank shed 5.04 per cent to Rs 244.85 and Bank of Baroda tumbled 4.34 per cent to Rs 147.65 on sustained selling pressure.

State Bank of India rose 1.93 per cent to Rs 424.25 on bargain hunting/short-covering after recent fall from the higher levels.

Elsewhere, Mahanagar Telephone Nigam rose 5.85 per cent to Rs 130.35 on renewed buying interest amid talks that the government may merge the public sector telecom major with the unlisted Bharat Sanchar Nigam Ltd.