Selling in heavyweights takes the wind off indices

STOCKS REPORT

Aggressive selling in index heavyweights, bank PSUs and oil stocks pulled the market down on the last trading session of the week. The BSE Sensex crashed 111.93 points to close at 4,832.71 after hitting an intra-day low of 4,823.10.

The Sensex had touched the day's high of 4,945.86 in the morning trade on back of strong gains in most Tata group stocks. The NSE CNX Nifty index ended 36.30 points or 2.35 per cent down to close at 1,508.45.

The market breadth, however, remained negative with Bankex being the biggest loser among the indices. The Bankex crashed 3.42 per cent to 2,522.95 as selling intensified among most PSU bank stocks.

Since the morning trade, Tata group companies were in limelight witnessing smart gains.

Tata Finance hit a 20 per cent upper circuit before closing at Rs 37.70, up 19.87 per cent, while Tata Infotech was up 7.05 per cent at Rs 374.20, Tata Elxi ended 3.47 per cent higher at Rs 102.90, Tata Investment Corp was up 9.92 per cent to Rs 204.45 and Tata Tea up 0.34 per cent to Rs 336.30, were the other major gainers.

Indian Hotels ended almost flat with gains of 0.60 per cent to Rs 343.90 coming off its day's high of Rs 400 - on selling at higher levels.

Other Tata group companies which were trading higher in the mid-afternoon trade ended negative by the end of the trading session on selling pressure. Tata Motors, Tata Chemical, Tata Steel, Tata Power-all ended in a negative territory in the range of 2-4 per cent.

The market trend appears to be bearish as there is lack of participation from investors, said market analysts. The average volume on the bourses have also declined sharply and accounted for a mere Rs 1,464.27 crore at the BSE on Friday.

PSU bank stocks were under selling pressure with BSE Bankex ending as the biggest loser among the indices. Oriental Bank of Commerce ended 6.92 per cent lower to 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 down 5.25 per cent to Rs 252.60 and Bank of Baroda down 3.64 per cent to Rs 160.35, were among the biggest losers.

According to market sources, the banking stocks have lost ground on sustained selling pressure after a leading foreign broking firm downgraded the PSU banking sector citing pressures owing to an impending wage settlement and reduced treasury contribution on banks earnings.

Index heavyweights Reliance Industries, State Bank of Indian and Hindustan Lever continue to drift further downwards, pushing the benchmark Sensex down at close.

Reliance Industries ended 3.55 per cent lower to Rs 431.70, while State Bank of India was down 2.47 per cent to Rs 468.25 and Hindustan Lever ended 0.62 per cent down to Rs 129 contributed to the fall of the Sensex.

Stocks of oil refining PSUs were hammered with HPCL down 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, contributing to the fall in the Sensex.

Analysts said, the oil PSUs were hammered on concerns that the government is considering cutting customs duties on both crude and petroleum products, thereby reducing protection enjoyed by domestic refining companies.

Index stocks including 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) were among the biggest loser.