Indices play hop-scotch

STOCK REPORT

Key indices ended marginally lower on Monday, with cement, oil marketing and banking shares figuring among the big losers. Markets fell for the fourth time in a row, having shed around 4 per cent from their record highs. Tech shares gained in anticipation of strong second quarter numbers from Infosys Technologies and TCS on Tuesday.

Dealers said regular foreign fund outflows over the last week has caused nervousness among traders. Also, with the second quarter results season underway, most investors are taking a cautious view fearing a slowdown in earnings growth, they said.

The Bombay Stock Exchange's 30-share Sensex fell 7.70 points to end at 8483.86. The index saw a high of 8564.85 and low of 8465.90. The National Stock Exchange's 50-share Nifty fell 7.20 points to close at 2566.85.

Trading volumes at Rs 72 billion were around 30 per cent lower than Friday. Meanwhile, Crisil Ltd reaffirmed its positive stance on corporate India's fundamentals, but said companies were headed for a consolidation phase.

Indian Petrochemicals Corp and Ranbaxy Laboratories were the biggest losers in the Nifty, down over 4 per cent each. Bharat Petroleum Corp, Associated Cement Cos, Tata Steel, Jet Airways, Hindalco Industries, Zee Telefilms, Gujarat Ambuja Cements and Tata Power were down 2-3 per cent.

Technology shares were the best performers, led by Infosys with a 2 per cent rise. The IT bellwether will be reporting second quarter numbers Tuesday and the market is expecting an upward revision in profit guidance for the full year. Satyam Computer Services, Wipro and HCL Technologies gained 1-2 per cent, while Tata Consultancy Services ended marginally up.

The CNX IT Index was up over 1 per cent at 3382.95. Dealers said the recent depreciation in the rupee had also improved sentiment for the sector. Over the last one month, the dollar has risen roughly 2 per cent against the rupee, a positive development for software companies as they earn their revenues in dollars.

Today the rupee fell to a 10-month low of Rs 44.75 per $1. Most quarterly numbers announced today were better than market expectations. Indiabulls reported a near five-fold rise in net profit and six-fold jump in revenues. The stock ended around 2 per cent up at Rs 188.10, but off the day's high.

Mid-sized software firm Aztec Software rose 9 per cent to Rs 159.15, after reporting 55 per cent rise each in net profit and revenues. HFCL shares gained 4 per cent after the company turned corner with Rs 162.9-million net profit, led by doubling of revenues.

Recently listed Yes Bank too turned corner with a Rs 142.5-million profit, led by 77 per cent increase in loans and 66 per cent jump in deposits.

"The market slipped after trading in the positive territory for most part of the session due to weakness in IPCL and Reliance (Industries) stocks. Infosys and Satyam Computer gave the much required support to the market," said Devang Shah, vice president, Sushil Finance Consultants.

Referring to today's markedly low turnover""Rs 72 billion as against Rs 103 billion on Friday""Shah said, "It was a dull session today, there was neither aggressive buying nor selling. Only 8-10 Nifty stocks witnessed significant action."

"Investors continued to be cautious ahead of the second quarter earnings announcements. Tomorrow will be a crucial day""as technology bigwigs Infosys Technologies and Tata Consultancy Services are expected to report robust July-September earnings."

The CNX Midcap Index closed at 3787.40, down 0.5 per cent. Engineers India, up 9.5 per cent was the top index gainer. United Phosphorus, down 5 per cent, was the major loser.

Dealers said that although mid-caps are slowing regaining investor interest, it was absolutely essential to trade only in specific stocks with strong fundamentals.