Wednesday, October 22, 2008

Sensex down over 513 points

The market gave away a large part of the last two days' gains on weak global markets, cautious outlook by IT firm Wipro and sustained selling by foreign funds. The BSE Sensex slumped 513.49 points or 4.81%. Though in the red, both the both the BSE Mid-Cap and Small-Cap indices outperformed the Sensex.

Index heavyweight Reliance Industries fell more than 5.5%. Tata Steel fell more than 12% after Moody's Investors Service lowered outlook on corporate family rating to negative from stable. Sterlite Industries fell more than 10%. The market breadth was weak.

IT stocks fell on Wipro's cautious outlook at the time of announcing Q2 results before trading hours. Metal stocks declined sharply on weak global metal prices. Banking stocks fell in weak market after recent gains triggered by the central bank's repo rate cut.

Down 6.79%, Japanese stocks led decline in Asian equities as poor US corporate results and falling commodity prices fanned worries of a protracted global economic slowdown. Stocks in Hong, China, Singapore, South Korea and Taiwan were down by bewteen 1.62% to 5.07%.

European markets which opened after Indian market, fell on global recession worries. Key benchmark indices in France, Germany and UK fell by between 3.51% to 3.69%. Trading in US index futures suggested the Dow would fall 185 points at the opening bell.

The BSE 30-share Sensex lost 513.49 points or 4.81% to 10,169.90. The Sensex fell 555.17 points at day’s low of 10,128.22 in late trade. The index declined 198.84 points at the day's high of 10,484.85 in early trade.

The S&P CNX Nifty was down 169.75 points or 5.25% to 3,065.15.

After an earlier steep slide, the Sensex had risen 708.04 points or 7.09% in two trading sessions to 10,683.39 on Tuesday, 21 October 2008, from its close of 9,975.35 on 17 October 2008, boosted by a repo rate cut by the central bank and on short covering on the stock market regulator's warning to foreign funds against overseas lending of shares.

There has been a massive erosion in investors' wealth this year. The barometer index is down 10,117.09 points or 49.86% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,036.87 points or 52.04% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked a turnover of Rs 3,087 crore today as compared to a turnover of Rs 3,882.49 crore on 21 October 2008.

Nifty October 2008 futures were at 3051, at a discount of 14.15 points as compared to spot closing of 3065.15. NSE's futures & options (F&O) segment turnover was Rs 50,046.83 crore, which was higher than Rs 49,845.05 crore on Tuesday, 21 October 2008.

The BSE Mid-Cap index was down 2.7% at 3,490.39 and the BSE Small-Cap index was down 2.02% at 4,111.67. Both the indices outperformed the Sensex.

BSE Metal index (down 7.9% to 5,619.45), BSE Realty index (down 7.57% to 2,433.70), BSE Bankex (down 5.78% to 5,504.48), BSE Oil & Gas index (down 5.56% to 6,397.58), BSE Teck index (down 5.37% to 2,160.07) underperformed the Sensex.

BSE FMCG index (up 0.62% to 1,969.56), BSE HealthCare index (down 3.16 % to 3,199.32), BSE Consumer Durables index (down 3.63% to 2,189.33), BSE IT index (down .4.01% to 2,790.27), BSE PSU index (down 4.22% to 5,046.33), BSE Power index (down 4.27% to 1,676.62), BSE Auto index (down 4.42% to 2,985.16), BSE Capital Goods index (down 4.45% to 7,226.93), underperformed the Sensex.

The market breadth was weak. On BSE, 778 shares advanced as compared to 1733 that declined. 77 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 5.83% to Rs 1,315.55, ahead of Q2 September 2008 result tomorrow, 23 October 2008. The Bombay High Court, on Tuesday, 21 October 2008, allowed the central government to implead itself in the RIL-Reliance Natural Resources (RNRL) case on gas supply after RNRL said it had no problem to the government being a party in the matter. The hearing of the case is now likely to continue after Diwali vacation.

Jaiprakash Associates (down 7.88% to Rs 72.50), ACC (down 7.11% to Rs 452.15), Larsen & Toubro (down 5.34% to Rs 815.15) were the major losers from the Sensex pack.

Reliance Infrastructure fell 6.56% despite 15.5% rise in net profit to Rs 288.97 crore on 51.11% rise in total income to Rs 2674.86 crore in Q2 September 2008 over Q2 September 2007.

Metal stocks declined on slump in metal prices on the London Metal Exchange. The BSE Metal index was down 7.9% and was the major loser from the sectoral indices on BSE. Sterlite Industries, Hindustan Zinc, National Aluminum Company, Steel Authority of India and Tata Steel fell by between 7.13% to 10.04%.

India’s largest steel maker by sales Tata Steel fell 12.04% after Moody's Investors Service lowered outlook on corporate family rating to negative from stable. The change in outlook reflects the more challenging operating conditions now facing Tata Steel UK as a result of the likely deterioration in demand in Europe and the UK in the next 18 months, with declining steel prices and reduced production volumes. Tata Steel, will declare Q2 September 2008 results on 24 October 2008.

India’s largest aluminum maker by sales Hindalco Industries skidded 5.67% reports it may sell a part of its Rs 2,081.34-crore stake in group companies, including Grasim Industries, Idea Cellular and Aditya Birla Nuvo, to raise funds to repay a part of the $3-billion bridge loan it obtained to buy Novelis.

Telecom stocks fell on reports telecom firms may have to shell out Rs 6,000 crore for failing to verify their customers. India's largest telecom services provider by market share Bharti Airtel fell more than 7.5%. India's second largest telecom services provider by market capitalisation Reliance Communications fell more than 8.5%. The government on Monday, 20 October 2008, announced that it would impose a fine of Rs 1,000 for every unverified subscriber.

Banking majors fell after recent gains on hopes lower rates will boost lending. ICICI Bank, HDFC Bank and State Bank of India fell by between 3.64% to 8.04%. The BSE's banking sector index Bankex declined 5.57%. ICICI Bank, State Bank of India and HDFC Bank have a weightage of 24.21%, 22.44% and 20.55%, respectively, in the Bankex.

Yes Bank was almost fell 2.92% in an otherwise weak market, as net profit jumped 40.50% to Rs 63.62 crore in Q2 September 2008 over Q2 September 2008.

Bank of India declined 6.41% after providing for Rs 108.60 crore on account of exposure to troubled US investment bank Lehman Brothers, in Q2 September 2008.

Power Finance Corporation fell 0.09% even on 16.70%rise in net profit to Rs 329.33 crore in Q2 September 2008 over Q2 September 2007.

The Reserve Bank of India cut repo rate by 100 basis points to 8% on 20 October 2008. The repo rate is the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days.

IT stocks slumped on overnight fall in American depository receipts (ADRs) and on cautious outlook by IT major Wipro. Weak rupee which augurs well for the sector did not stem the slide. The BSE IT index fell 4.37%.

India's fourth largest IT exporter by sales Wipro fell 5.79% after it said the outlook is cautious in the near term given the extent of strain on the global economy. Wipro ADR fell 2.87% on Tuesday, 21 October 2008, ahead of the results. Wipro reported 56.13% spurt in net profit to Rs 852.50 crore on a 15.48% increase in total income to Rs 5551.60 crore in Q2 September 2008 over Q1 June 2008.

India's third largest IT exporter by sales Satyam Computer Services lost 2.93%. Its ADR skidded 1.63% overnight. The company raised its earnings guidance in rupee terms at the time of announcing Q2 September 2008 results on Friday, 17 October 2008.

India's second largest IT exporter by sales Infosys fell 3.56%. Infosys ADR lost 5.21% overnight. India's largest IT services provider by sales Tata Consultancy Services lost 2.63%, ahead of Q2 results today.

Infosys, Satyam Computer Services, Tata Consultancy Service and Wipro have a weightage of 55.06%, 16.01%, 10.45% and 7.09%, respectively, in the BSE IT index.

Tech Mahindra rose 1.3% as net profit rose 16.36% to Rs 295.98 crore in Q2 September 2008 over Q1 June 2008.

Compucom Software surged 4.93%, on proposal to consider issue of bonus shares.

Geodesic rose 2.93% as net profit jumped 23.54% to Rs 48.95 in Q2 September 2008 over Q1 June 2008.

Educomp Solutions tumbled 11.47% on BSE, on profit taking, as net profit soared 51.40% to Rs 25.39 crore in Q2 September 2008 over Q1 June 2008.

The rupee weakened to a record low against the dollar on Wednesday as losses in the stock market fuelled concerns more foreigners would likely pare their risk exposure and repatriate investments. At the Interbank foreign exchange (Forex) market, the rupee, which ended steady at 49.00/49.01 yesterday, fell by 25 paise to 49.25 against the greenback.

PSU OMCs fell despite crude oil falling nearly $3 to hit a one-week low below $70 a barrel and extending a 4% slide in the previous session, on mounting worries that output cuts by Organisation of Petroleum Exporting Countries (OPEC) will not be enough to offset slackening energy demand. BPCL, HPCL and Indian Oil Corporation fell by between 2.09% to 8.15%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price

Bongaigaon Refinery & Petrochemicals slumped 7.23%, on slipping into the red in Q2 September 2008

Most realty stocks declined today after yesterday’s rise despite hopes cut in lending rates will spur demand for residential properties. The BSE Realty index fell 7.57% and was the second major loser from the sectoral indices on BSE. Realty majors, DLF, Indiabulls Real Estate Unitech fell by between 5.05% to 12.75%.

BSE FMCG index rose 1.26% and was the only gainer from the sectoral indices on BSE. United Spirits, Hindustan Unilever and REI Agro rose by between 0.05% to 5.08%. India’s largest cigarette maker by sales ITC rose 3.05%. The company will announce the Q2 September 2008 result on 24 October 2008.

Rate sensitive auto stocks fell despite hopes rate cuts would spur auto demand which is largely driven by finance. Maruti Suzuki India, Mahindra & Mahindra, Hero Honda Motors declined between 1.95% to 7.14%.

India’s largest commercial vehicle maker by sales Tata Motors declined 4.94% on reports of missing its original Nano rollout deadline of October-December 2008.

Ashapura Minechem dropped 19.7% on reports the company faces three lawsuits in New York federal court seeking a total of more than $47 million.

Reliance Natural Resources declined 3.43% on BSE on muted growth in net profit in Q2 September 2008.

Kirloskar Brothers jumped 7.41% on its consortium winning an order worth Rs 1446 crore, with the company’s share pegged at Rs 270 crore.

Pantaloon Retail India gained 0.07% as net profit surged 21.90% to Rs 36.18 crore in Q1 September 2008 over Q1 September 2007.

Champagne Indage was locked at lower limit of 5%, a 52-week low on plan to raise up to Rs 120 crore.

Max India provisionally ended down 6.57% as net profit declined 30.67% to Rs 11.73 crore in Q2 September 2008 over Q2 September 2007.

Piramal Healthcare fell 7.57% as net profit fell 14.2% to Rs 69.44 crore on 19.7% rise in total income to Rs 636.9 crore in Q2 September 2008 over Q2 September 2007.

Housing Development & Infrastructure clocked the highest volume of 99.89 lakh shares on BSE. Chambal Fertilisers & Chemicals (79.51 lakh shares), IFCI (65.13 lakh shares), Reliance Petroleum (61.34 lakh shares), Reliance Natural Resources (59.23 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 189.32 crore on BSE. Reliance Capital (Rs 169.53 crore), ICICI Bank (Rs 149.63 crore), Housing Development & Infrastructure (Rs 148.64 crore) and State Bank of India (Rs 135.48 crore) were the other turnover toppers in that order.