Banks, pharma stocks hit

STOCKS REPORT

The markets continued moving downwards as banking and pharma stocks were the worst hit in Monday's trading. Even smart gains in frontline technology stocks failed to lift the markets as the Sensex ended 31.37 points lower to close at 4,378.62.

Among the indices, the BSE Healthcare index (representing the basket of pharma stocks) and Bankex were the biggest losers, down 2.14 per cent and 1.71 per cent, respectively. The NSE S&P Nifty index ended 9.20 points lower at 1,482. The BSE volume were at its 11-month low of Rs 1,331.30 crore.

Banks stocks were hammered in Monday's trading amid concerns that rising inflation will trigger higher bond yields, which in turn, will depress treasury gains for banks.

State Bank of India was down 4.86 per cent to Rs 416.20, while other PSU banks, such as Bank of Baroda was down 5.36 per cent to Rs 154.35, Andhra Bank was down 5.26 per cent to Rs 40.50, Vijaya Bank slipped 8.47 per cent to Rs 39.45, and Indian Overseas Bank slipped 4.39 per cent to Rs 40.30, were the big losers.

According to market analysts, the bank stocks also were under selling pressure since the morning trade after a leading foreign broking firm downgraded the banking sector.

CLSA in its latest report said, "The government's directive to banks to hike total credit availability to farmers, as well as restructure loans to farming sector will raise worries of directed lending coming back into vogue."

Among heavyweights, Reliance ended 2.21 per cent lower to Rs 434.95 and ITC ended 0.85 per cent lower, contributing to the fall in the market. An institutional dealer said, "The overall sentiment is bearish with investors shying away from taking any fresh positions."

Pharma stocks continue to be under selling pressure with pivotals-Ranbaxy Labs down 3.43 per cent to Rs 878, Dr Reddy's Labs down 2.63 per cent to Rs 733.45 and Cipla down 1.73 per cent to Rs 207.25.

Pharma stocks have been losing ground on sustained selling pressure since a foreign broking firm downgraded the sector last week amid fears that commoditisation of generics in the US markets would result in shrinking opportunity for Indian pharma companies.

Tech stocks witnessed bargain hunting at lower levels with frontline tech major Infosys gaining 1.58 per cent to close at Rs 5,348.20. Wipro was up 3.66 per cent to Rs 1,568.55.

Satyam Computer, however, declined from Rs 297.20 to Rs 285.50 before settling at Rs 286.90, down 2.35 per cent from its previous close.

Auto stocks were trailing weak with Maruti Udyog (down 3.35 per cent to Rs 379.60) after touching an intra-day high of Rs 397. Even Tata Motors came off from its day's high of Rs 407 to finally close at Rs 390.70 on the back of strong volumes of more than 26.8 lakh shares at the BSE.

Refining PSUs BPCL (up 2.06 per cent to Rs 353.65) and HPCL (up 0.79 per cent to Rs 330.20) ended higher - yet off their day's highs - on selective buying on talks that the government may ask oil firms to pay higher dividends in order to lift its revenues.

BHEL ended 1.45 per cent higher to close at Rs 495.50) on sustained buying interest after the company confirmed that it has received an order worth Rs 80 crore for a gas compressor project in Oman.