Telco stock falls to 10-year low

Telco stock falls to 10-year low
ENS ECONOMIC BUREAU

Mumbai, Oct 9: Grasim and Telco stocks touched their new lows on the Bombay Stock Exchange as the market seemed to lose interest in the old economy index based stocks. The Telco stock touched a decade low of Rs 77 in the morning as the continuous loss suffered by the automobile major from its car project has eroded investor interest in the company.

Before this Telco stock had touched the same level in April 1990. But later in the day the stock recovered and finally closed at Rs 80.10 after touching a high of Rs 81.80. On Friday the stock closed at Rs 79.80. A large number of analysts had recommended the selling of the Telco stock as the increasing losses in the company was a cause for concern.

Aditya Birla's Grasim Industries also touched its 15-month low level of Rs 175 as the stock hit the lower circuit and closed Rs 19.60 or 9.95 per cent down at Rs 177.40.

A high volatility was witnessed in Grasim stock after opening at Rs 197 in the morning. It touched a high of Rs 201.25 and closed at Rs 177.40. Analysts feel that despite the financial restructuring being undertaken by Grasim, the margins would be under pressure due to the slow down in the sectors like Cement, VSF, Steel. The recent hike in petroleum price would further add pressure on the company's bottomline.

Meanwhile, the benchmark Sensex closed with a fall of about 36 points in dull activity on the opening day of new account on the Bombay Stock Exchange (BSE) following fresh selling pressure from investors and reduced activity by foreign funds.

In spite of a sharp setback in the Nasdaq Composite Index, technology stocks attracted some support on expectations of excellent second quarter results from IT leaders Infosys Technologies and Satyam Computers. The boards of both the companies are meeting tomorrow to announce financial results.

The proposed rolling settlement that had taken a heavy toll on the stocks in the previous week, continued to affect the market sentiment with operators gradually winding up their outstanding positions before the new system is introduced in the near future. While foreign institutional investors (FIIs) kept away from the market showing little interest at a time when the market is depressed, market sources said there is no other way but to square up long positions as the rolling settlement would increase cost of trading and reduce participation in the markets drastically affecting the liquidity.

Sensex opened slightly up at 4106.15 and later fluctuated in a restricted range of 4135.16 and 4055.42 before closing at 4056.07 as against last Friday's close of 4092.42, netting a loss of 36.35 points. The BSE-100 index dropped by 20.01 points to 2030.28 compared with last weekend close of 2050.29.