IT, auto stocks decline

STOCK REPORT

Key indices ended down nearly 2 per cent as investors squared off long positions a day ahead of the expiry of March series futures and options.

Investors were also cautious because of weakness in global markets following a further fall in US home prices and weak consumer confidence in March.

Dealers said volumes were low with fewer-than-expected rollovers to April derivatives series. Combined turnover on the National Stock Exchange and Bombay Stock Exchange was Rs 12,400 crore compared to Rs 9,900 crore on Monday.

Information technology shares led Wednesday's fall. Both the BSE and CNX IT Index ended down more than 3.5 per cent. Investors are anxious about earnings prospects of the sector, as the rupee has appreciated nearly 2 per cent against the dollar since January 1. Possibilities of a slowdown in the US economy also resulted in poor sentiment towards the sector.

Shares of Satyam Computer did not react to the announcement of a $200 million (Rs 860 crore) deal from Applied Materials. Satyam Computer ended down 3.4 per cent at Rs 455.70.

Frontline automobile shares fell as March sales growth is likely to slow due to higher interest rates, dealers said.

Also, investors remain wary as Jan-Mar earnings are likely to be subdued due to high prices of raw materials.

The BSE Auto Index was down 2.6 per cent.

Hero Honda Motors was down 1.4 per cent, Tata Motors down 4.4 per cent, Maruti Udyog, and Mahindra & Mahindra down 3 per cent each.

Some large-cap pharmaceutical companies' shares rose on value buying and as the sector is seen as defensive, analysts said.

Wednesday's top Nifty gainer Ranbaxy ended up 3.6 per cent at Rs 339. Dr Reddy's Laboratories rose 1.5 per cent as it got the US Food and Drug Administration approval for anti-biotic ciprofloxacin.

National Aluminium Co rose 1 per cent to Rs 227, as the minister of mines Monday said the company's net profit for 2006-07 (Apr-Mar) is likely to grow 50 per cent to Rs 2,300-2,400 crore.

Tata Steel rose 1 per cent on reports the company is in talks with Japan's Nippon Steel to jointly build a Rs 2,000 crore plant to manufacture auto grade steel.