Sensex index dips 25 pts amid mixed trend in pivotal counters

Mumbai, Oct 18: Sensex edged lower for the second day in a row today, a leading broker said.

The barometer index declined today amid a mixed trend in pivotals.

The 30-share BSE Sensex lost 25.35 points (0.2 per cent), to settle at 12,858.48. The BSE Sensex recovered after having lost over 50 points in mid-afternoon trade following disappointing Q2 results from Bajaj Auto. Earlier, the market was range-bound during mid-morning and early afternoon trade.

The S&P CNX Nifty shed 4.35 points or 0.12 per cent to settle at 3,710.65 points. Before it resumed flat at 3715.20 points.

From a lifetime closing high of 12,928.18 on October 16, Sensex has lost 69.70 points in the past two days. On Tuesday, the Sensex had come within striking distance of 13,000 in early trade.

The market activity in the near term will be stock specific, given that the Q2 results season will gather steam from now. Some major Q2 results scheduled tomorrow are Reliance Industries, L&T, ACC, Canara Bank, HDFC, Hexaware Tech, ONGC, Reliance Energy, Ranbaxy Labs and Sun Pharma. Money today flowed out of Bajaj Auto, other auto stocks and from HDFC Bank to other front line stocks such as Ranbaxy, Dr Reddy's Lab, ICICI Bank, L&T, Bharti Airtel and State Bank of India, which are yet to unveil Q2 results.

BSE clocked a turnover of Rs 4035 crore, higher than Tuesday's Rs 3806 crore. Bajaj Auto plunged 7 per cent to Rs 2,900, disheartened by a fall in margins when revenue growth remained strong. Bajaj Auto's net profit rose 10 per cent in Q2 September 2006, to Rs 317.59 crore from Rs 289.36 crore in Q2 September 2005. Net sales rose 30.4 pc to Rs 2,435.97 crore from Rs 1,866.95 crore.

Bajaj' s result weighed on other auto pivotals. Hero Honda shed 1.4 pc to Rs 747, TVS Motor lost 1.7 pc to Rs 121, car major Maruti Udyog shed 1.2 pc to Rs 948 and Tata Motors lost 1 pc to Rs 890.55.

Hindalco witnessed a bout of post-result volatility. The stock rose 2.6 pc to Rs 188. It had retreated as much as 1.6 pc, to Rs 180.40, soon after results hit the market.

Pharma pivotals were in demand. Ranbaxy gained 3% to Rs 424 and Dr Reddy's Lab gained 2.7 pc to Rs 735.

ICICI Bank gained 2.4% to Rs 742. It has a substantial 7.8 pc weightage in the Sensex. SBI rose 1.1% to Rs 1,045. HDFC Bank (down 2.8 pc to Rs 980) dropped for the second day in a row after announcing its Q2 results, which did not live up to expectations.

Wipro lost 3 pc to Rs 557, strong Q2 results notwithstanding as the company said wage hike will impact margin by 2 pc in Q3 December 2006.The company announced Q2 results before trading hours today.

Tata Steel dropped 1.2 pc to Rs 509.35, after Standard&Poor's put it on credit watch with negative implications, after the company launched a .6 billion takeover bid for Anglo-Dutch steelmaker Corus on Tuesday.

L&T rose 1.5 pc to Rs 1,309 ahead of its Q2 results scheduled tomorrow.

Index heavyweight Reliance Industries lost 0.6 pc to Rs 1,208.

RIL announces Q2 results tomorrow.

Grasim lost 1.7 pc to Rs 2578. After trading hours, Grasim Industries reported stronger than expected Q2 results. The net profit jumped 80 pc to Rs 337.84 crore (Rs 187.65 crore), beating market expectations. Four brokerages had forecast a between 41% to 67.8 pc growth in Grasim's Q2 net profit to between Rs 264.70 crore to Rs 315 crore. The top line growth too surpassed market expectations.

Yes Bank rose 3.4 pc to Rs 106 after the private sector lender said it would issue 10 million shares to Swiss Reinsurance Company at Rs 120 per share.

Glenmark Pharma jumped nearly 18 pc to Rs 389.35 after Germany's Merck licensed a diabetes drug to the Indian firm. A large block deal of 80 lakh shares was executed in the scrip on BSE at Rs 384 on BSE.

Exide Industries lost 0.6% to Rs 38.15. The company today reported a 50 pc jump in net profit for Q2 September 2006 to Rs 43.74 crore (Rs 29.08 crore). Revenue rose 34% to Rs 451.19 crore (Rs 336.42 crore).

Select sugar shares surged. Balrampur Chini Mills jumped 10% to Rs 110.35. The stock rose on heavy volume of 54 lakh shares. Bajaj Hindustan gained 7% to Rs 340. 15.6 lakh shares changed hands in the counter on BSE GMR Infrastructure jumped 11% to Rs 286.55 after the company said the Tindivanam-Ulundurpet road project on the Chennai-Dindigul (NH-45) highway in Tamil Nadu, being executed by a subsidiary, GMR Ulundurpet Expressways, has achieved financial closure.

Bank of Rajasthan rose 2.2 pc to Rs 44 after it reported a surge in net profit for Q2 September 2006 to Rs 55.22 crore (Rs 5.24 crore).

Meanwhile, Prime Minister Manmohan Singh said on Wednesday the government was aiming to achieve 10 percent annual GDP growth by the year 2011/12, brokers added.

UNI

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