Broad-based profit booking sinks the indices, finally!

Finally the day of the big correction arrived to remind traders that it is also possible for the indices to lose substantially. The decline pulled down most of the momentum stars among frontline stocks.

The indices opened the day on a dull, flat note, as most traders were unsure of the direction after Friday's marginal decline. The indices gained some ground in morning trades before starting the daylong decline.

The sell off gathered momentum within an hour of opening and the brief attempt to stabilise around mid-day failed by late afternoon. After another sharp decline in late afternoon trades, indices were range bound during the closing half hour.

Bank stocks were among the heavy losers and the bank index was the biggest loser among sectoral indices. ICICI Bank lost over 4 per cent, SBI lost over 3 per cent and HDFC Bank closed over 2 per cent lower. PNB lost close to 5 per cent.

Among the technology stocks, Infosys lost a per cent while Wipro and Satyam lost over 2 per cent each.

Sensex closed at 7606, a loss of 148 points, and the Nifty at 2324, a loss of 37 points. Nifty August futures discount to the spot index narrowed marginally to 9 points from Friday's 10 points.

SAIL, Tata Tea and ONGC were among the major gainers among Nifty stocks while PNB, Tata Motors and ICICI Bank were the major losers.

Reliance Industries has made yet another significant gas find, this time in the state of Madhya Pradesh. For the first time, the company has discovered gas at a coal bed methane (CBM) block.

The in-place reserves have been certified by the Director General of Hydrocarbons at 3.75 trillion cubic feet. Recoverable reserves have not been estimated so far and the company is drilling more exploratory wells in the block. The stock lost close to 2 per cent.

Tata Motors was among the biggest losers in frontline stocks after the company reported disappointing sales volumes for the month of July. Passenger vehicle sales for the month was lower by over 15 per cent as compared to last year. The company attributed the decline in sales to the heavy rains in the states of Maharashtra and Gujarat.

Overall sales of Tata Motors were higher by close to 4 per cent helped by a 13 per cent increase in commercial vehicle sales. The surge in exports at 170 per cent for the month also helped the company. The stock lost close to 5 per cent.

Bharti Televentures has decided to outsource its call centre operations to third party vendors including Hinduja TMT and Mphasis. Bharti was trading firm in early trades before losing ground and closing lower. The 3-year deal is reportedly worth $230 million. The stock closed a per cent lower after trading firm in early trades.

Shareholders of Hindalco have approved the proposal to split the company's equity shares. Every Rs10 share would be split into 10 shares of Re1 each. The stock was trading with gains of a per cent in early trades before losing close to a per cent.

The first signs of Q1 losses affecting the investment plans of PSU oil companies are visible, with BPCL reportedly having a rethink on its investment plans. BPCL had lined up Rs1,600 crore of investments during the current year including Rs600 crore for expansion of its retail network.

Tata group company VSNL has reportedly offered part of its under sea cable network for purchase or dedicated lease to PSU telecom company BSNL. The PSU company had plans to set up its own under sea cable network and the VSNL move is seen as a move to pre-empt such plans.

VSNL, which used to be the monopoly international telecom carrier, had lost part of its business after BSNL roped in other providers like Reliance and Bharti. The stock lost close to 4 per cent today.

Mid-Cap Action