Mumbai, March 13: The dividing line between the old economy and the new economy stocks, which had become more pronounced over the last few sessions, went in for a toss on Monday, as almost all the stocks joined the general market slide. At close, the BSE Sensex was more than 300 points down from the day's high, with the technology heavyweight Infosys too closing at the lower circuit level.However, at the end of the day, a 5 per cent rise in the FMCG major and index-heavyweight Hindustan Lever restricted the Sensex's fall to 179 points against its previous close of 5301.78 points.
After Monday's bloodbath, market is feeling jittery, and is looking at a Sensex level of around 4,900 before any buying resumes. Profit-booking in infotech, media and communication stocks due to advance tax payments is one of the major reasons for the current sell-out, feel brokers.
On Monday, Global, DSQ, HCL Tech, Silverline and Rolta were among the prominent stocks to join Infosys in hitting the down circuit on the BSE.According to dealers, the institutions were also on the sidelines, but the operators indulged in heavy selling, almost across the board.
To add to the market's woes, there was ample supply of papers from retail investors whenever a stock showed some gains. For Tuesday, brokers expect the market to open slightly higher, as the Sebi has decided to put on hold for some time the hike in cash component of the margin. In addition, the FII investment figures for Friday shows a Rs 212 crore inflow, against a lacklustre trend during the earlier days of the current month. However, it's basically a wait-and-watch game for the majority of brokers.
According to some brokers, with today's hammering in infotech stocks, it is likely that the focus might shift to FMCG stocks for a while. According to Rajiv Sampat at Parag Parikh Financial Advisory Services, ``the market might take a relook at the defensive sector stocks from the present levels.'' Also on Monday, the pharma sector stocks were in the limelight, as a numberof them bucked the trend and also hit the upper circuit.
On Monday, the market opened on a strong note with technology stocks opening very firm. But this mood could not be sustained for a long time and by about 10.30, most technology stocks started losing ground. The downtrend in these stocks continued throughout the day. Among others, cement stocks took the harsh beating with L&T and Gujarat Ambuja closing at the lower circuit.
However, pharma stocks were the major gainers for the day, with almost all key pharma stocks closing above 5 percent. FMCG stocks like Dabur and P&G rallied. HLL saved the Sensex by closing up 5.5 percent. Sensex stocks which were at the upper circuit include Cadbury, Novartis, M&M, Dabur, Knoll Pharma, Cipla, Mudra Consultants, Kopran Ltd. Birla Erricson, Odyssey Tech, Apollo Tyres, Denim Enterprices, Ipca Lab, Parke Davis, Lupin Lab, Bata India, Emtex Ind, Aurobimdo Pharama, Citicorp Securities, German Remedies, Dr.Reddy, Today's Writing, Centum Elec and Indian ShavingProducts.
Sebi nod for amendments
The Sebi Board on Monday approved the amendments to be made to the Brokers and Sub-brokers Regulations in order to facilitate derivatives trading in exchanges. The formal gazette notification is expected on Tuesday, while the stock exchanges are in the process of making the appropriate modifications to their bye-laws to give effect to the notification. Sebi chairman Mehta said that it would be mid-May before derivatives trading can actually commence.
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