IT, oil, bank stocks pull Sensex down 112 points

The markets ended lower for the second consecutive day as traders unwound their position on the last trading session of the week. The BSE Sensex crashed 111.93 points to 4,832.71 on aggressive selling in index heavweights "" IT, oil and banking stocks.

Among indices, the Bankex was the biggest loser, down 3.42 per cent to 2,522.95. The BSE PSU index was down 2.55 per cent to 3,057.42 and the BSE Tech index was down 2.81 per cent at 1,159.40 points.

Brokers said the markets were hit by a combination of factors "" while IT stocks were said to be hit by a portfolio allocation among institutional investors to make way for the TCS IPO, bank stocks were hit severely after a foreign brokerage downgraded the financial sector. Sources said the markets had taken note of the movements in some quarters to raise domestic deposit rates.

Infosys Technology ended 3.08 per cent lower to Rs 5,108.25, Wipro ended 2.87 per cent down at Rs 1,479.50 and Satyam Computer ended 2.78 per cent lower to Rs 300.90 in the first signs of a reshuffle.

Stocks of oil refining PSUs were hammered on reports that the government was considering a cut in the Customs duties on both crude and petroleum products, thereby reducing the protection for domestic refining companies.

As a result, the HPCL stock lost 2.62 per cent to Rs 347.85, BPCL lost 2.24 per cent to Rs 352.95, Indian Oil lost 3.25 per cent to Rs 384.15 and Chennai Petroleum ended 3.16 per cent lower to close at Rs 113.55.

Index heavyweight Reliance Industries ended 3.55 per cent lower at Rs 431.70, while the State Bank of India scrip lost 2.47 per cent to Rs 468.25 and Hindustan Lever ended 0.62 per cent lower at Rs 129.

Of the 30 scrips in the Sensex basket, 28 closed with losses, and these include Maruti Udyog, down 5.62 per cent to Rs 388.75, Bharti Tele-Ventures down 5.50 per cent to Rs 141.80, HDFC Bank down 4.90 per cent to Rs 359.95, and ICICI Bank down 2.81 per cent to Rs 259.65.

The two gainers in the Sensex basket were auto stocks, Bajaj Auto and Hero Honda.

Among PSU bank stocks, the Oriental Bank of Commerce scrip ended 6.92 per cent lower at Rs 215.85, Bank of India was down 6.80 per cent to Rs 50.75, Vijaya Bank was down 6.31 per cent to Rs 45.30, Indian Overseas Bank was down 5.32 per cent to Rs 45.40, Punjab National Bank was down 5.25 per cent to Rs 252.60 and Bank of Baroda was down 3.64 per cent to Rs 160.35.

The market breadth was negative with 1,102 shares closing with losses, while 626 shares advanced and 94 shares closed unchanged.

Tata group company stocks were in the limelight, but the group stocks ended mixed. Group IT companies such as Tata Infotech (up 7.05 per cent to Rs 374.20), Tata Elxsi (up 3.47 per cent to Rs 102.90) were higher on expectations that these companies may finally be merged into TCS.

Group gainers included Tata Finance, up 19.87 per cent to Rs 37.70, Tata Investment Corp scrip was up 9.92 per cent to Rs 204.45, and Tata Tea up 0.34 per cent to Rs 336.30, but Indian Hotels ended almost flat with gains of 0.60 per cent to Rs 343.90.

Other group majors such as Tata Motors, Tata Chemicals, Tata Steel and Tata Power, all ended with losses in the range of 2 to 4 per cent.

The BSE reported a turnover of Rs 1,464.27 crore. Amitabh Chakraborty, head of research at Kotak Securities said, "Since most of the Tata group companies are presently holding shares of Tata Sons, there is a scope of value unlocking once the TCS issue is listed. Overall, the market ended weak as investors did not want to carry forward their positions."