Sensex drops ahead of Infosys results

The market displayed a divergent trend today. While the market traded flat amid the lacklustre movements in the pivotal stocks, a number of non-Sensex mid-cap stocks and side counters attracted buying interest. Action was also seen in the new listings like Bank of Maharashtra, Power Trading, Biocon and Petronet LNG, as short-term investors exited and long-term investors entered.

Trading on the bourses was characterised with the pre-results cautiousness. Companies in the old economy are expected to post improved results on the back of strong economic growth. While the results of the tech companies would be seen with interest, investors would wait for the guidance for the next year, especially in the light of the outcry in the US against the outsourcing and recent hardening of the rupee against the US dollar.

Infosys Technologies (down 3.25% to Rs 5,139.85) ended sharply lower – coming off its day’s high of Rs 5,358.85 – on selling at higher levels. Wipro (down 0.87% to Rs 1,452) also ended lower – coming off its day’s high of Rs 1,485 – on selling at higher levels ahead of the announcement of quarterly results.

Heavyweights Reliance Industries (down 2.03% to Rs 561.40), ITC (down 1.45% to Rs 1,075.10) and State Bank of India (down 0.61% to Rs 619.25) also contributed to the weakness of the Sensex after leading early gains. Cement pivotals L&T (down 2.01% to Rs 596.25), Gujarat Ambuja Cements (down 1.57% to Rs 306.30) and Grasim (down 1.18% to Rs 1,122.30) ended lower on selling at higher levels after early gains.

Hero Honda Motor (down 1.65% to Rs 504.85) ended lower – coming off its day’s high of Rs 523.10 – on selling at higher levels after the company’s Q4 and FY 2003-04 results fell short of market expectations. Old economy pivotals Hindalco (down 2.03% to Rs 1,307), HDFC Bank (down 1.52% to Rs 375), HPCL (down 1.41% to Rs 514.30), HDFC (down 1.37% to Rs 655), Tata Steel (down 1.02% to Rs 396.25), Reliance Energy (down 1.02% to Rs 773.85), Tata Motors (down 0.69% to Rs 498.95) and Tata Power (down 0.57% to Rs 404.65) also ended lower.

Biocon (up 19.54% to Rs 694.75), the new listing of the last week, gained further ground – touching a new high of Rs 697.40 – on sustained buying from local as well as foreign institutions. Banking stocks rose in early trades amid reports last Friday that the SC has upheld the constitutional validity of the Securtisation Act empowering the financial institutions to attach and sell assets of companies who have defaulted in repaying loans taken by them.