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New Economy stocks prune Sensex's loss to 20 points

Renewed buying support in select New Economy stocks resulted in the market erasing a better part of its earlier losses today, after a subdued start.

The Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex) settled with a modest loss of 19.83 points at 3,353.11, recovering from an intra-day low of 3,295.

The mood remained cautious with the 2 July 2001 deadline banning carry-forward trading fast approaching. While operators unwound their outstanding positions, institutions - local as well as foreign - made fresh purchases at lower levels. Players, however, felt that this was more of a technical pullback.

The BSE Sensex opened in the red with a gap of 4 points at 3,368.68. It slipped immediately on selling pressure in Old as well as New Economy stocks. In intra-day trades, the Sensex went below the 3,300-mark to touch a low of 3,295.34. However, last-minute buying in New Economy stocks resulted in the market recovering from its lower levels. Eventually, the Sensex settled at 3,353.11, losing 19.83 points or 0.59% from its previous close, but gaining 58 points from the day's low.

The National Stock Exchange's S & P CNX Nifty Index lost 9.45 points to settle at 1,078.30.

Turnover on BSE dropped to Rs 1,092.92 crore (Rs 1,328.18 crore on 15 June 2001) from 6.45 crore shares traded. Of the 1,217 issues traded, declines outnumbered advances with 664 losers and 475 gainers. 78 issues remained unchanged.

Pivotal stocks

Tech stocks opened weak following profit warnings issued by two leading tech companies in the US - Nortel Networks and JDS Uniphase - both of which outsource a good part of their software requirements from their Indian counterparts. Tech stocks, however, recovered towards the close of the trading session on renewed institutional buying.

NIIT recovered from a new 52-week low of Rs 335.20 to Rs 377 before settling at Rs 361.85, still losing 3.53% from its previous close.

Reliance Industries came off from a high of Rs 357.60 to Rs 339.50 before settling at Rs 342, down 4.38% from its previous close. The stock has been losing ground despite optimism expressed by the company's chairman Dhirubhai Ambani at the AGM held in Mumbai late last week. Foreign funds were major sellers on the counter.

Cement stocks like ACC (down 1.96% to Rs 130.25), L&T (down 2.37% to Rs 214.20), Grasim (down 1.03% to Rs 316) and Gujarat Ambuja Cements (down 0.05% to Rs 185) declined on unwinding by speculators.

Selling was seen in pharmaceutical pivotals like Dr Reddy's Laboratories (down 1.42% to Rs 1,425), Ranbaxy Laboratories (down 1.26% to Rs 443) and Cipla (down 1.25% to Rs 1,087).

Tractor and utility vehicle major M&M (down 0.91% to Rs 98.40) settled in the red after touching a new 52-week low of Rs 96.10.

Reliance Petroleum, Hindustan Lever, Tata Steel, HPCL and Telco also settled in the red.

On the other hand, Zee Telefilms (up 5.33% to Rs 113.65) bounced back smartly from its day's low of Rs 105 after bargain hunters stepped in. There has been substantial institutional interest on the Zee counter over the last few sessions, especially after the company's decision to add two more channels -- Zee TV and Zee News -- to its basket of pay channels from 10 June 2001. The Zee stock topped volumes on BSE with over 60 lakh shares being traded. Foreign funds like Oppenheimer and Capital International were believed to have been buyers on the Zee counter.

Cigarette major ITC moved up on institutional buying from an intra-day low of Rs 711 to Rs 754, gaining 4.32% over its previous close.

However, leading the recovery of the Sensex from its lower levels was Infosys Technologies, which moved up from an intra-day low of Rs 3,135.35 to Rs 3,434 before settling at Rs 3,419.80, up 0.53% from its previous close.

Infosys announced today that it would start offering services to a subsidiary of US railway firm Burlington Northern Santa Fe Corporation. Under the business agreement, Infosys will develop software to integrate and manage various information technology systems for Burlington Northern and Santa Fe Railway Company (BNSF).

Satyam Computer (up 2.54% to Rs 195.50) also recovered from an intra-day low of Rs 182 on fresh buying support. Close to 39 lakh Satyam shares were traded on BSE.

Two- and three-wheeler major Bajaj Auto (up 2.34% to Rs 262.40) posted gains on institutional buying.

Lubricants major Castrol (up 2.15% to Rs 225.90) bounced back from an intra-day low of Rs 219.05 on fresh rumours that BP Amoco, Castrol's new parent, will make an open offer to its shareholders at a higher price for acquiring a 20% stake in the company.

Fast moving consumer goods (FMCG) major Nestle (up 1.20% to Rs 532) ruled steady on rumours that the company's Swiss parent is planning to hike its stake in the company through the creeping acquisition route.

Colgate (up 0.43% to Rs 162.45) recovered from an intra-day low of Rs 158.10 after the company posted its FY 2001 results. For the year ended 31 March 2001, the oral care major posted a net profit of Rs 62.50 crore (Rs 51.80 crore) on sales of Rs 1,176.90 crore (Rs 1,089.60 crore).

Others like Glaxo (up 1.96% to Rs 338.80), State Bank of India (up 1.19% to Rs 213), ICICI (up 0.56% to Rs 72.10) and BSES (up 0.44% to Rs 192.85) also settled in the positive zone.

Tech stocks

Among non-Sensex tech stocks, PSI Data Systems (down 7.67% to Rs 154) remained subdued following reports that I-flex Solutions is not interested in buying the Group Bull's 50% stake in the company. However, the stock bounced back from its intra-day low of Rs 143.50.

Mphasis BFL (down 4.97% to Rs 195) slipped even after the company's board conveyed to the shareholders its acceptance of Chrysalis' offer to invest Rs 45 crore at Rs 350 per share. This represents a equity dilution of approximately 7%. The offer price represents a premium of approximately 75% over the current levels and approximately 12% over the prescribed Sebi minimum formula for dilution of equity stake.

Other tech stocks like Aftek Infosys, Geometric Software, Mastek, SSI, Tata Infotech, Hughes Software, Pentasoft Technologies, VisualSoft, Fujitsu ICIM, Silverline Technologies, DSQ Software, Digital Equipment, Trigyn Technologies, Aptech and Wipro also settled in the red, but recovered from their intra-day lows.

On the other hand, Subex Systems (Rs 54.90) hit 8% upper limit of the circuit breaker.

Stocks like Information Technologies, Aztec Software, Polaris Software, HCL Technologies and Infotech Enterprises settled in the positive zone on selective institutional buying.

Telecom stocks

Optical fibre makers Sterlite Optical (down 3.86% to Rs 366) and Aksh Optifibre (down 0.98% to Rs 141.10) slipped on selling pressure.

Selling was seen in other telecom-related stocks like Goldstone Technologies, Birla Ericsson, Framatome Connectors, Shyam Telecom, Tata Telecom, Usha Beltron, Surana Telecom, ITI and Punjab Communications.

On the other hand, stocks like Mobile Telecom, Krone Communications, Sterlite Industries, Finolex Cables and VSNL settled in the positive zone.

Media stocks

Media stocks like Balaji Telefilms (Rs 172.85), Mukta Arts (Rs 151.90), Pritish Nandy Communications (Rs 44.80) and Tips Industries (Rs 97.80) bounced back to hit 8% upper limit of the circuit breaker on renewed buying.

Buying was seen in other media stocks like Creative Eye, Mid-Day Multimedia, Cinevista Communications, Padmalaya Telefilms, Adlabs Films, Sri Adhikari Brothers and Saregama India.

Jain Studios, Pentamedia Graphics, Vision Tech and TV 18 settled in the red.

Pharmaceutical stocks

Selling pressure was seen in non-Sensex pharmaceutical stocks like KDL Biotech, Cadila Healthcare, Torrent Pharma, Morepen Laboratories, Glenmark Pharma, Lupin Laboratories, Aurobindo Pharma, Alembic, E. Merck, Astra IDL, Kopran, Wyeth Lederle, Fulford, Duphar Pharma, Pfizer, Hoechst Marion Roussel, Sun Pharma, Novartis and German Remedies.

On the other hand, J. B. Chemicals (up 6.28% to Rs 104.95) gained further ground after the company informed BSE that it has filed a patent application for New Chemical Entities (NCE) with United States Patent and Trade Mark Office. NCE have a potent anti-inflammatory action.

FMCG stocks

Selling was seen in FMCG stocks like Gillette India, Britannia Industries, Bata India, Dabur India, P&G, Cadbury India, Reckitt Benckiser, Nirma and Tata Tea.

Selective buying was seen in stocks like United Breweries, Bausch & Lomb, Kodak India, VST Industries and SmithKline Beecham Consumer Healthcare.

Banking and finance stocks

Among banking and finance stocks, LIC Housing Finance (down 12.17% to Rs 36.45) crossed 8% lower limit of the circuit breaker.

Among the others, while Bank of India (Rs 15.55) hit 8% lower limit, HDFC Bank, IndusInd Bank, UTI Bank, Nedungadi Bank, IDBI Bank, Vysya Bank, ICICI Bank, Bank of Baroda, Dhanalakshmi Bank, Federal Bank, J& K Bank and Global Trust Bank declined.

On the other hand, United Western Bank, South Indian Bank, Citi Union Bank, HDFC, Bank of Punjab and Corporation Bank settled in the positive territory.

Side counters

Among side counters, Tata Infomedia (Rs 125.60) and Crisil (Rs 103.30) hit 8% lower limit of the circuit breaker.

BPL (down 3.52% to Rs 57.50) came off on poor FY 2001 performance. For the year ended 31 March 2001, the consumer electronics major posted a 24.24% drop in net profit of Rs 81.15 crore (Rs 107.13 crore).

Selling was seen on other side counters like Mirc Electronics, Bombay Dyeing, Bayer Diagnostics, Tata Honeywell, D-Link India, Saw Pipes, Amara Raja Batteries, Ashok Leyland, Colour Chem, Jaiprakash Industries, Adani Exports, Raymond, Essel Packaging, Elbee Services, Jindal Steel, Videocon International, Sesa Goa, Thomas Cook and BPCL.

On the other hand, Hinduja TMT (up 11.87% to Rs 84.80) crossed 8% upper limit of the circuit breaker.

Buying was also seen on other side counters like Nalco, Shree Rama Multitech, Khandwala Securities, Foseco India, Siemens, Triumph International Finance, TVS Suzuki, Bharat Electronics, Indian Rayon, Bharat Electronics, Philips India, Esab India, Gati Corporation, Apollo Hospital, Indo-Gulf Corp, ICI India, Monsanto India, Thermax and Voltas.

Source: www.capitalmarket.com

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