The market's anxiety that correction was needed after runaway gains last week was satisfied as late morning trades saw a subdued trend. Old Economy blue chips were the worst hit. There were gains in select stocks though, but not enough to lift the market .
PSU stocks attracted buying interest following the success of the Maruti IPO, which was oversubscribed over 10 times. The overall market displayed mixed trends.
The undertone of the market, though, is optimistic; with signs of improvement in the economy prompting positive sentiment. Outsourcing stories have lifted stocks in sectors like auto ancillaries, pharmaceuticals and consumer electronics. MQ 2003 and FY 2002-03 results of companies in Old Economy sectors like cement, steel, banking and automobiles have been impressive. Besides, institutional as well as retail participation in the market has also risen to significant levels, helping the sentiment to stay buoyant.
At 12:27 IST, the BSE Sensex was trading 6.56 points lower than par at 3,492.94, off its day's high of 3,510.10 as well. The NSE S & P CNX Nifty Index was up 0.20 points at 1,100.40.
Diversified private sector giant Reliance Industries (down 2.20% to Rs 329) led the weakness in the Sensex . Over 7.10 lakh RIL shares were traded on BSE thus far.
Conglomerate L & T (down 1.66% to Rs 234.50) eased after recent gains.
FMCG pivotals Colgate Palmolive (down 1.27% to Rs 139.80), Nestle India (down 1.01% to Rs 562.50) and Hindustan Lever (down 0.70% to Rs 169.90) were subdued after recent gains.
Tech pivotals HCL Tech (down 0.66% to Rs 143.80) and Satyam Computer (down 0.40% to Rs 186) were trading lower on selling pressure.
Old Economy pivotals Telco (down 1.41% to Rs 192), Hindalco (down 0.45% to Rs 752), Grasim (down 0.44% to Rs 453.05), BSES (down 0.37% to Rs 295.30) and Hero Honda Motor (down 0.26% to Rs 245) were all caught in the red.
Dr Reddy's Labs (down 1% to Rs 1,047) and GlaxoSmithKline (down 0.06% to Rs 358) were marginally in negative .
Lubes major Castrol India (up 4.42% to Rs 209) jumped up on volumes of over 45,000 shares .
Largest media listing Zee Telefilms (up 3.72% to Rs 86.50) climbed on volumes of over 15 lakh shares on BSE.
Old Economy pivotals Bajaj Auto (up 1.64% to Rs 561.85), Tata Steel (up 1.59% to Rs 159.85), MTNL (up 1.39% to Rs 102), Gujarat Ambuja Cements (up 0.75% to Rs 193.75), ICICI Bank (up 0.74% to Rs 143.50) and ACC (up 0.22% to Rs 158.70) held gains on selective buying.
Heavyweights tobacco major ITC (up 0.81% to Rs 750.55) and largest bank by assets State Bank of India (up 0.14% to Rs 359) were trading in positive zone.
Infosys Tech (up 0.72% to Rs 3,080.35) was trading off its day's high of Rs 3,138.65.
i-flex solutions (up 1.12% to Rs 965.55) bounced back from the day's low of Rs 950 after the company informed that its flagship product Flexcube has been selected by Egyptian American Bank (EAB) as its core-banking platform. EAB will deploy Flexcube Universal Banking Solutions encompassing both retail and corporate banking along with Flexcube @ Internet Banking Solution. Flexcube will be deployed in all 30 branches of the bank and will replace the bank's flat file mainframe based legacy system.
Mascot Systems (up 1.50% to Rs 104.80), SSI (up 0.54% to Rs 84.50) and Polaris Software (up 0.23% to Rs 109.25) gained ground on sustained buying.
Other non-Sensex frontline tech stocks Digital GlobalSoft (down 1.16% to Rs 423.30), Wipro (down 0.82% to Rs 923.55), NIIT (down 0.87% to Rs 136.50) and Hughes Software (down 0.76% to Rs 220.70) were in the red.
Steel Authority of India (up 4.57% to Rs 16.71) sprang forth on buying interest from operators and institutions. The stock will replace Nestle India in the NSE S & P CNX Nifty Index with effect from 4 August. Over 53 lakh Sail shares were traded on BSE so far.
RCF (up 2.49% to Rs 34.95) edged up on reports that the company will recover around Rs 200 crore in the current year from the central government as a backlog for the dues that it had claimed for producing excess ammonia.
Other non-Sensex PSU stocks Madras Fertilizers (up 4.29% to Rs 18.25), FACT (up 4.17% to Rs 32.50), Nalco (up 3.35% to Rs 109.60), Indian Oil (up 2.03% to Rs 411.50), National Fertilizers (up 1.75% to Rs 43.65), Chennai Petroleum (up 1.50% to Rs 50.90), Kochi Refineries (up 1.28% to Rs 70.95), Container Corp (up 1.21% to Rs 264.80), ONGC (up 0.33% to Rs 509.25) and Gail India (up 0.22% to Rs 113.20) made headway.
PSU stocks have been rising of late on hopes that the successful public issue of Maruti Udyog will give fresh impetus to the government's disinvestment programme. The Maruti IPO, which was oversubscribed on the very first day of opening last Thursday, is subscribed over 10 times.
Dredging Corp of India (down 2.39% to Rs 325), Neyveli Lignite (down 2% to Rs 41.70), Bharat Earth Movers (down 1.59% to Rs 86.70), Bharat Electronics (down 1.24% to Rs 318.90), Bongaigaon Refinery (down 0.88% to Rs 33.90), Balmer Lawrie (down 0.77% to Rs 90.20) and Shipping Corp of India (down 0.27% to Rs 73.70) were trading lower on selling pressure.