Double Blow For Dalal St

Equities slipped further on Monday after the second quarter sales of FMCG giant Hindustan Lever fell short of expectations.

The woes of the markets were compounded when Dr Reddy's Laboratories prospects of earning royalty from a drug licensed to Denmark's Novo Nordisk faded when the Danish firm suspended its clinical trials.

The two factors dealt a further blow to sentiment, already battered by bleak global markets. A bankruptcy filing by US-based telecommunications major WorldCom added to the weakness in the technology sector.

The benchmark BSE sensex slipped below the 3,200-mark to settle at a seven-week low at 3,153.34, down by 76.93 points from its Friday's close. On the National Stock Exchange (NSE), the S&P CNX Nifty shed 23.90 points to close at 1,012.00 points. Losers outnumbered gainers by nearly seven to one in thin volumes.

Hindustan Lever slipped 1.26 per cent to settle at Rs 184.70, a 52-week low after the company announced its results. For the second quarter ended June 2002, the company posted a 4.13 per cent fall in net profit to Rs 447.34 crore on sales of Rs 2,671.57 crore, compared with Rs 2,931.25 crore in corresponding quarter last year. Other bluechip stocks such as ITC (down 3.16 per cent to Rs 651.90), Reliance Petroleum (down 1.30 per cent to Rs 22.75) and Reliance Industries (down 1.08 per cent to Rs 256.75) also slipped under selling pressure.

Meanwhile, Dr Reddy's slipped 13.82 per cent to Rs 874.20, but off from its day's low of Rs 830, after the company announced that Novo Nordisk has suspended the clinical development of its dual acting insulin sensitiser ragaglitazar.

Hindalco (up 0.28 per cent to Rs 679.45) managed to end with marginal gains on selective buying, after the Aditya Birla group's consolidation plan for the aluminium major. Select public sector undertaking (PSU) stocks such as Bhel (down 3.48 per cent to Rs 169.25), HPCL (down 2.93 per cent to Rs 285.20) and MTNL (down 0.89 per cent to Rs 150) remained subdued on selling pressure.

Technology stocks continued to stay weak. Key stocks such as HCL Technologies (down 5.83 per cent to Rs 213.40), Satyam Computer (down 5.59 per cent to Rs 223.85) and Infosys Technologies (down 2.51 per cent to Rs 3,086.25) slipped, following a crash in the US markets last Friday, hit by fresh accounting scams -- the latest casualty being Johnson & Johnson.

On Friday, the Dow Jones Industrial Index slipped by 390.23 points to 8,019.26, leaving it at its lowest close since October 1998. The Nasdaq composite index lost 37.80 points to 1,319.15.