Metals prove a millstone

STOCK REPORT

Key indices ended down 1 per cent on Wednesday on profit sales, after four straight sessions of range-bound trade.

Metal companies, which had outperformed the broad market on Tuesday, were major laggards on Wednesday as investors cashed in the gains. The BSE Metal Index, down 1.5 per cent, was the worst hit among sector indices.

Steel Authority of India, down 2 per cent at Rs 76, Tata Steel, down 2 per cent at Rs 505.50, and Hindalco Industries, down 1.5 per cent at Rs 161.95, were major losers.

The Sensex closed at 11406.65, down 95.97 points or 0.8 per cent. Intraday, it moved between 11374.86 and 11579.92.

The Nifty closed 3335.80, down 28.80 points or 0.9 per cent. Intraday, it moved between 3325.10 and 3369.65.

Turnover on both the exchanges together was Rs 8,940 crore, down 3 per cent from Tuesday. CNX Midcap and S&P CNX 500 ended down 1 per cent each.

On BSE, bears outnumbered bulls 2:1.

Concerns over expensive valuations following 7 per cent rise in indices over the past one month also hit sentiment, dealers said. "Expensive valuations have made investors more nervous about the market," a dealer said.

However, dealers see the fall in indices as a sideways correction.

"The market has rallied about 15 per cent in past sessions and is consolidating at current levels. From here on we can expect the trend to be positive," Vijay Dugud, senior vice-president at KJMC Capital Market Services, said.

Mahindra and Mahindra, down 4 per cent at Rs 633, was the worst hit among Nifty companies. Jet Airways, down 3.6 per cent at Rs 557, and Housing Development Finance Corp, down 3.5 per cent at Rs 1,278, were other major laggards.

HCL Infosystems ended up 2 per cent, but off highs, after the company on Wednesday reported a fall in net profit for the June quarter to Rs 26.88 crore from Rs 32.42 crore a year ago.

VSNL, up 2 per cent at Rs 414, was the top Nifty gainer.

Siemens India, down 1.6 per cent at Rs 1,044, was the other major gainer.