Metals worst hit, IT scrapes through

Metal stocks were the worst hit on Thursday. The benchmark Bombay Stock Exchange (BSE) Sensex tanked by 4.28 per cent, while the BSE metal index fell by 6.51 per cent. Realty index continued its falling spree by shedding 162 points or 5.56 per cent, while IT sector bore the least brunt.

"Since the last two weeks, metal prices have been down on the London Metal Exchange. The US housing slowdown is having a big impact on this sector as well. But, mainly it is selloff on the LME that has compounded their woes," said Hitesh Agrawal, vice-president-research, at Enam Securities.

The broking house also feels that there could be a recovery in short term, but metals will remain weak for 18 months. Tata Steel lost Rs 55 (10.34 per cent) to Rs 575.35. Sterlite Industries went down by 8.22 per cent to Rs 558.40. Welspun Gujarat dipped 7.27 per cent to Rs 225.15, and Hindalco 5.62 per cent to Rs 145.30.

IT stocks managed to save some value as the IT Index went down by 2.62 per cent. Other losers were Bankex ( 5.42 per cent), capital goods( 4.43 per cent), Oil & Gas ( 4.37 per cent), PSU (3.93 per cent), FMCG ( 3.47 per cent), Auto (3.11 per cent) and IT ( 2.61 per cent).

An analyst from a foreign brokerage house said, "There has been a liquidity crunch in the market, so dollar has appreciated giving these stocks a fillip. There has been more of dollar outflow than inflow and ECB curb has acted as catalyst for this".

Patni Computers lost 7.61 per cent to Rs 384.80, followed by Moserbaer 6.41 per cent to Rs 258.50 and TCS 3.70 per cent to Rs 1087.80.

Real estate companies too were battered. "Sub-prime issue is itself related to housing. So, we are seeing in this index down in a way. The realty index was a leader in the past. It has got affected more than other indices," said Ashu Madan, national head (retail equity), Religare Enterprises.

Parsvanath Developers was down by 8.69 per cent to Rs 302, Unitech Ltd 8.06 per cent to Rs 466.40. Billionaire Kushal Pal Singh-promoted DLF was down by 3.19 per cent to Rs 584.05.

Banking stocks were also down by 5.42 per cent. The only gainer was Centurion bank of Punjab, which was up by 0.48 per cent during the day.

"FIIs are still worried about banks' exposure to collateralised debt obligation (CDOs) and that is one reason this sector is seeing a loss," a banking analyst with a domestic brokerage said.