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Tech stocks lead 63-points fall in Sensex

The market declined today, the first day of settlement on the Bombay Stock Exchange (BSE), on sustained selling pressure in New as well as Old Economy stocks.

The BSE 30-share Sensitive Index (Sensex) shed 63.09 points to settle at 3,318.76.

While selling pressure was almost across-the-board, New Economy stocks were the worst hit. Apart from institutional selling, New Economy stocks slipped on account of unwinding of outstanding positions ahead of the fast approaching 2 July 2001 deadline banning carry-forward trading.

Sustained weakness on tech-heavy Nasdaq has also become a cause for concern for tech stocks on the local bourses. A slowdown in the US economy is bound to affect the performance of the tech sector. The Nasdaq composite index shed 23.92 points on Friday to 2,034.84. Players feel that tech stocks will show a sharp drop in the profitability for the quarter ending 30 June 2001.

The BSE Sensex opened in the red with a gap of 3 points at 3,378.17. It slipped immediately and remained in the red for the entire trading session. After touching an intra-day low of 3,306.83, the Sensex settled at 3,318.67, losing 63.09 points or 1.87% from its previous close.

The National Stock Exchange's S & P CNX Nifty Index shed 20.65 points to settle at 1,067.

Turnover on BSE dropped to Rs 864.73 crore (Rs 998.49 crore on 22 June 2001) from 5.72 crore shares traded. Of the 1,698 issues traded, declines outnumbered advances with 1,034 losers and 487 gainers. 177 issues remained unchanged.

Pivotal stocks

Selling was seen in New as well as Old Economy stocks.

Software training major NIIT (Rs 296.55) hit 16% lower limit of the circuit breaker to touch a new 52-week low. The software training sector has been severely affected by the slowdown in the US economy, as the requirement for IT-skilled manpower has reduced drastically of late. NIIT, with a major chunk of revenues coming from the training business, has been one of the most affected.

Satyam Computer (down 10.87% to Rs 155.75) also remained subdued after touching a new 52-week low of Rs 153.80. While operators were busy unwinding long positions, lay investors sold tech stocks wary of the growth rates of this sector. Satyam topped volumes on BSE with over 50 lakh shares being traded.

Infosys Technologies came off from a high of Rs 3,407.90 to Rs 3,261.15 before settling at Rs 3,349, losing 2.64% from its previous close on unwinding of long positions by operators as well as institutional selling pressure.

Media major Zee Telefilms (down 3.28% to Rs 101.80) also declined on selling pressure, but recovered from an intra-day low of Rs 98.55. Close to 40 lakh Zee shares were traded on BSE. Foreign institutional investors (FIIs) were said to have bought the Zee stock at lower levels.

Selling was seen in heavyweight pivotal stocks like ITC (down 3.42% to Rs 765.15), Hindustan Lever (down 2.05% to Rs 200.50) and Reliance Petroleum (down 2.09% to Rs 46.75).

Tractors and utility vehicles major M & M (down 2.89% to Rs 88.95) was weak and touched a new 70-month low of Rs 88 in intra-day trades.

Selling was seen in other automobile pivotals like Telco (down 2.96% to Rs 59) and Bajaj Auto (down 0.69% to Rs 257.75).

Meanwhile, Dr Reddy's Laboratories (up 2.21% to Rs 1,534), and ICICI (up 1.01% to Rs 70.15) settled in the positive zone on selective buying.

Bhel (up 1.18% to Rs 167.20) gained ground on renewed buying support on hopes that lifting of the US economic sanctions would benefit the company.

Reliance Industries (RIL) bounced back from an intra-day low of Rs 336 to Rs 343.35 before settling at Rs 341.95, gaining 0.01% over its previous close. Over 10 lakh RIL shares were traded on BSE.

Institutional buying lifted the L & T stock (up 0.71% to Rs 207) from an intra-day low of Rs 200.

Tech stocks

Among non-Sensex tech stocks, PSI Data Systems (Rs 134.35) hit 16% lower limit of the circuit breaker after the Aditya Birla group's Indian Rayon announced that it will acquire Groupe Bull's 50.35% controlling stake in the company at a price of Rs 186.80 per share. Indian Rayon will also make an open offer to acquire a further 20% stake from the company's shareholders at the same price, which may take the total shareholding of Indian Rayon in PSI Data to 70.35%.

Mastek (Rs 88.75) and HCL Technologies (Rs 258.85) hit 16% lower limit of the circuit breaker on institutional selling pressure.

Wipro (down 13.64% to Rs 1,277) also slipped as a result of the US economic slowdown. Wipro Technologies, the US software division of the company, accounts for a majority (57% in FY 2001) of Wipro's total revenues. Following the slowdown, the software major has a large number of employees lying idle.

Polaris Software (down 14.15% to Rs 294), DSQ Software (down 14.15% to Rs 46.70), Infotech Enterprises (down 12.30% to Rs 84.15), Silverline Technologies (down 9.17% to Rs 55) and Trigyn Technologies (down 8.51% to Rs 37.65) exceeded 8% lower limit of the circuit breaker.

Aztec Software (Rs 76.85), Nucleus Software (Rs 57.10) and Sierra Optima (Rs 56.05) hit 8% lower limit.

Selling was also seen in other tech stocks like SSI, Rolta India, Ramco Systems, Pentasoft Technologies, Sonata Software, R. S. Software, Mascot Systems, VisualSoft Technologies, Fujitsu ICIM, Aftek Infosystems, Digital Equipment, Tata Infotech, Aptech, Hughes Software, CMC, Subex Systems and Mphasis BFL.

Telecom stocks

Among telecom stocks, Global Tele-Systems (Rs 108.95) and HFCL (Rs 64.20) were frozen at 16% lower limit of the circuit breaker on massive unwinding of outstanding positions.

Optical fibre makers Sterlite Optical (down 7.79% to Rs 326.80) and Aksh Optifibre (down 7.50% to Rs 120.85) declined on selling pressure.

Selling was also seen in other telecom-related stocks like Mobile Telecom, Krone Communications, Tata Telecom, Goldstone Technologies, Punjab Communications, Sterlite Industries, Birla Ericsson, Framatome Connectors, Shyam Telecom, Finolex Cables and ITI.

Media stocks

Media stocks like Crest Communications (down 15.59% to Rs 52.25), Saregama India (down 10.75% to Rs 132.45), Pentamedia Graphics (down 10.17% to Rs 59.60), TV 18 (down 9.40% to Rs 67) and Jain Studios (down 9.20% to Rs 39.50) settled below 8% lower limit of the circuit breaker.

Tips Industries (Rs 69.15), Sri Adhikari Brothers (Rs 67.20) and Pritish Nandy Communications (Rs 35.50) hit 8% lower limit.

Selling was also seen in stocks like Mid-Day Multimedia, Cinevista Communications, Adlabs Films, Padmalaya Telefilms, Mukta Arts, Creative Eye and Balaji Telefilms.

Pharmaceutical stocks

Among non-Sensex pharmaceutical stocks, Shasun Chemicals (down 14.08% to Rs 36) and Aurobindo Pharma (down 9.12% to Rs 187.90) crossed 8% lower limit of the circuit breaker on selling pressure.

Selling was also seen in Suven Pharma, Kopran, J. B. Chemicals, Ipca Laboratories, Morepen Laboratories, Pfizer, Sun Pharma, Novartis, Burroughs Wellcome, Cadila Healthcare, Alembic, SmithKline Beecham Pharma, Lupin Laboratories, E. Merck, German Remedies, Panacea Biotech, Wockhardt, Torrent Pharma and Rhone Poulenc.

On the other hand, Wyeth Lederle (up 2.74% to Rs 194.90) came off after hitting 8% upper limit of the circuit breaker at Rs 204.85 in opening trades. For the year ended 31 March 2001, the MNC pharmaceuticals major posted a 19.93% rise in net profit to Rs 31.76 crore (Rs 26.48 crore) on sales of Rs 237.65 crore (Rs 233.73 crore).

Selective buying was also seen in other pharmaceutical stocks like Duphar Pharma, Parke Davis, Glenmark Pharma, Fulford and FDC.

FMCG stocks

Selling continued in fast moving consumer goods (FMCG) stocks like Archies Greetings, Gillette India, VST Industries, Procter & Gamble, Nirma, Bausch & Lomb, SmithKline Beecham Consumer Healthcare, Tata Tea, Reckitt Benckiser, Bata India, Britannia Industries, United Breweries and Dabur India.

Side counters

Among the side counters, Adani Exports (Rs 278.25) hit 16% lower limit of the circuit breaker after the company announced its FY 2001 results on Friday. For the year ended 31 March 2001, the company posted a 6.59% rise in net profit to Rs 118.30 crore (Rs 110.98 crore) on sales of Rs 3,014 crore (Rs 2,814.30 crore).

Mirc Electronics (Rs 195.05) hit 16% lower limit of the circuit breaker on sustained selling pressure. The stock has been losing ground since the last three sessions in the absence of buying support.

Hinduja TMT (down 10.21% to Rs 65.95) crossed 8% lower limit.

Shree Rama Multitech (Rs 34), Saw Pipes (Rs 93), Colour Chem (Rs 45.60), Khandwala Securities (Rs 45.95) and Supreme Industries (Rs 40.20) were frozen at 8% lower limit.

Selling was also seen on other side counters like Thermax, Modi Rubber, Apollo Tyres, Bharat Forge, Amara Raja Batteries, Indo-Gulf Corp, Tata Power, Blue Dart Express, TVS Suzuki, Syngenta India, Philips India, Jindal Steel, Bayer India, Basf India, Vikas WSP, BPCL, Essel Packaging, Sesa Goa, Max India, Wartsila India, BPL and Moser Baer.

On the other hand, D-Link India (Rs 260.70) hit 8% upper limit of the circuit breaker.

Indian Rayon (up 2% to Rs 81.50) recovered from an intra-day low of Rs 76.75 after announcing that it has signed a definitive agreement to acquire 50.35% controlling stake from Groupe Bull France (Bull) in PSI Data Systems at a price of Rs 186.80 per share, aggregating Rs 71 crore.

Selective buying was also seen in Kotak Mahindra Finance, ITW Signode, Titan Industries, MRF, Motherson Sumi, IBP, Kesoram Industries, Ingersoll Rand, G. E. Shipping and Carrier Aircon.

Source: www.capitalmarket.com

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