Stocks plunge on FII selloff

STOCK REPORT

Key indices ended 1 per cent lower on fall in index heavyweights led by Tata Steel.

Market recovered from lows at noon after the RBI hiked repo rate by 25 bps to 7.5 per cent, but kept reverse repo unchanged at 6 per cent.However, heavy selling by FIIs pushed indices down again, dealers said.

Standard & Poor's upgrading its sovereign credit rating on India to investment grade for the first time in 14 years also failed to lift sentiment.

The Sensex ended at 14,090.92, down 121.04 points or 0.9 per cent from Monday.The Nifty ended at 4,072.65, down 51.80 points or 1.3 per cent.

Turnover on both the exchanges was roughly Rs 15,600 crore as against Rs 12,100 crore on Monday. CNX Midcap and S&P CNX 500 Index ended down 1 per cent each.

BSE Metal Index, down 5 per cent, was the worst hit among the BSE indices. On the BSE, declines outnumbered advances 2:1. Tata Steel shares slipped 10.5 per cent to Rs 462 after the company outbid Brazil's CSN to acquire Corus group for $11.3 billion. Analysts found the deal, which values Corus at eight times its estimated earnings before interest, tax, depreciation and amortisation for 2006, expensive.

Tata Steel agreed today to pay 608 pence a share for Corus, 34 per cent higher than its original bid price of 455 pence in November, and topping a final bid of 603 pence from CSN.

On Tuesday, Tata Steel reported net profit of Rs 1,060 crore during the October-December quarter, up 41 per cent from a year ago. The numbers were in line with market expectations.

M&M ended down 3 per cent at Rs 900 after the company reported a mere 3.5 per cent rise in October-December net profit at Rs 240 crore.

Hindustan Petroleum ended down 1 per cent at Rs 312 on profit sales. The company reported net profit of Rs 410 crore, compared with net loss of Rs 1,080 crore a year ago.

Hero Honda Motors ended down 0.1% per cent at Rs 715. The company reported October-December net profit at Rs 210 crore, down 20 per cent from a year ago.