Date:24/03/2007 URL: http://www.thehindubusinessline.com/2007/03/24/stories/2007032404801300.htm

Back Capital goods stocks hold in weak markets

Aarati Krishnan

After forging a tentative recovery during the week, the markets closed Friday's trading session on a lacklustre note, with the BSE Sensex shedding 22 points, while the CNX Nifty declined 14 points over the previous close. Mid-cap stocks fared better than the bellwethers with the BSE Midcap Index closing the day with marginal gains.

Select new listings and mid-cap stocks notched up significant gains. Capital goods and banking, financial services were the key exceptions to the weak trend, with select stocks in these sectors making strong gains during the day. Market breadth was neutral with an even balance between advances and declines.

Index movers

ITC, Infosys Technologies, ICICI Bank and ONGC were the key stocks that led the decline in the index while L&T, BHEL, HDFC and Reliance Industries, apart from FMCGs were the key gainers. The ITC stock lost value on a company statement that suggested that high taxes imposed by some States, on a transition to VAT, could impact earnings. Among the large caps, capital goods majors L&T and BHEL led the gains.

Mid-cap movers

Several recently listed stocks witnessed strong gains. Page Industries (up 19 per cent), Transwarranty Finance (12 per cent), Oriental Trimex (11 per cent) were some of the stocks in this category. Apart from this, Jindal Photo Films, Dalmia Cements, CRISIL, NMDC and Bharat Electronics were other key gainers during the session. Though PSU banks participated in the overall decline, select private sector banks attracted strong buying interest with UTI Bank (up 6 per cent) and Kotak Bank (5 per cent), notching up strong increases for the day. Select mid-sized IT companies AztecSoft, Cambridge Solutions and NIIT Technologies also saw buying. Among the stocks that registered significant declines were Jet Airways, Sesa Goa, AllCargo Logistics and AIA Engineering.

Stock-specific action

IndiaBulls Real Estate, the realty arm of IndiaBulls Financial Services, listed on Friday. The stock, which opened at Rs 380 levels, saw considerable intra-day volatility, touching a high of Rs 414 before closing at Rs 325.

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The IFCI stock gained 7 per cent on expectations of a stake sale to a strategic investor.

The Dabur India stock built on recent gains, on speculation about an overseas acquisition by the company. HCL Technologies witnessed heightened activity on unconfirmed reports of a possible acquisition by the company in the IT space. The company clarified that it was evaluating several opportunities but was not close to a binding agreement, with respect to any acquisition.

Pointers to the next session

NTPC announced board approval for investments in two additional 500 MW power plants at Simhadri. The board of Thomas Cook India approved a rights offer of Rs 225 crore and a dividend, after close of trading hours.

Stocks that registered a spike in trading volumes on Friday compared with the preceding week's average were Dalmia Cements, Mastek, Transwarranty Finance and Graphite India. The release on inflation showed WPI growth hovering close to the previous week's levels.