Monday, October 27, 2008

Sensex tests 8000 but recorver sharply

Published on Mon, Oct 27, 2008 at 09:43 , Updated at Mon, Oct 27, 2008 at 17:41
Source :

Every single morning we come across the flashes like - Asian markets crashed; US markets plunge; rupee and crude touching all-time lows and SGX Nifty deep in red. It has been a similar pattern for trading sessions in October. The Sensex has fallen from 13,202 to sub-8000 levels in October. The trend continued today with the Sensex losing another 10% till afternoon.

However, a smart pullback helped the benchmark index recoup its losses in the later half of the day. The market saw a V-shape recovery on the back of short covering and buying support by the domestic institutional investors. Domestic insurance companies bought the index stocks in the late trade. Volumes were low at the institutional desk ahead of truncated week.

Buying was seen in telecom, selective realty, oil and metal stocks. However, selling continued in auto, FMCG, pharma, capital goods, banking (barring ICICI Bank) and power (barring Reliance Infrastructure) stocks.

The 30-share BSE Sensex has touched an intraday low as well as October 2005 level of 7,697.39 (down 1,003.68 from previous close), before ending the day at 8,509.56, down 191.51 points or 2.2%. The 50-share NSE Nifty fell 59.8 points or 2.31%, to settle at 2524.20. It has hit a low of 2252.75 (down 331.25 from previous close).

Frontline indices have recovered 812.17 points and 271.45 points from day's low. A 20 Nifty stocks have recovered over 15% from day's low. The BSE Midcap Index fell 129.45 points or 4.18%, to close at 2,966.23. The BSE Small Cap Index lost 182.99 points or 5%, to settle at 3,478.84.

Lackluster rollovers seen in today's session; Nifty rollover stood at 47.1% while Marketwide rollover at 43.9%. The Nifty open interest Put-Call Ratio (PCR) was at 0.66; implied volatilities increased further. Nifty November Futures added 62.6 lakh shares and ended with a discount of 4.2 points. October Futures saw a mild premium of 1.8 points.

Market breadth was extremely weak throughout the day; about 698 shares have advanced while 2305 shares have declined. About 187 shares remained unchanged.

The total traded turnover stood at Rs 59,015.60 crore. This includes Rs 9,636.40 crore from NSE Cash segment, Rs 46,002.30 crore from NSE F&O and the balance Rs 3,376.90 crore from BSE Cash segment.

Among the frontliners, Unitech closed up by 37.58%. Ambuja Cements and Idea Cellular were up 10.36% and 7.06%, respectively. Bharti Airtel, Reliance Industries, Reliance Infrastructure, Reliance Communication, Sterlite Industries and ICICI Bank gained 2-6%.

However, Tata Motors, Mahindra & Mahindra, Jaiprakash Associates, Cairn India and NALCO tumbled 10-14%. Grasim, Tata Power, SBI, Larsen & Toubro, HDFC, Sun Pharma, Power Grid Corp and ONGC fell 7-9.5%.

The BSE Auto Index plunged 147.03 points or 5.93% at 2,333.93. Tata Motors and M&M fell close to 14%. Hero Honda and Maruti lost around 3-4%.

FMCG stocks GlaxoSmith Consumber, United Breweries, Dabur India, ITC, HUL, Nestle and United Spirits tumbled 5-9.7%. FMCG Index was down by 102.41 points or 5.63% to 1,715.50.

Healthcare Index lost 139.63 points or 4.97% to 2,671.84. Pharma stocks like Glenmark, Dishman Pharma, Matrix Lab and Ipca Labs fell 14-20%.

BSE Capital Goods Index tumbled 271.09 points or 4.10% to 6,339.80. L&T and Crompton Greaves fell over 7%. BHEL was down by 1.05%.

Bankex slipped 177.85 points or 3.82% to 4,472.02. SBI fell 8.63%. PNB and HDFC Bank were down over 4-5%. However, ICICI Bank gained 2.03%.

BSE Power Index was down by 50.75 points or 3.49% at 1,402.15. GMR Infra, Tata Power, Power Grid Corp, Reliance Power and NTPC lost 3.5-11%.

Metal Index ended lower by 125.32 points or 2.85% 4,268.56. NALCO and JSL fell over 12-13%. Jindal Steel, Hindalco and Tata Steel tumbled 5.5-9%.

BSE IT Index fell 0.44% to 2,586.97. Tech Mahindra, Wipro and HCL Tech fell 2.5-7%. However, TCS, Satyam and Infosys ended in green.

Among the midcap stocks, Consolidated Construction, Dishman Pharma, Allcargo Global, Dredging Corp and MIC Electronics tanked 19-20%.

In the small cap space, ABG Infralogistics, Golden Tobacco, Bhagwati Banquet, Genus Power and Ahluwalia lost 20%.

On the other hand, Oil & Gas Index gained 27.67 points or 0.54% at 5,179.31. Essar Oil and Reliance Industries gained 6-7%. ONGC plunged 5.85% and Cairn India lost close to 16%.

Telecom stocks like Bharti Airtel, Idea Cellular and Reliance Communication gained 3.6%-7%.

BSE Realty Index jumped 74.01 points or 4.25% to 1,817.28. Unitech was up 41.86%, after management clarification. Sanjay Chandra, Managing Director of Unitech clarified there are no defaults in Noida as reported, the company didn't get one plot due to farmer agitation. There is a group spreading rumours and the company has decided to approach the regulators for the same.

Other realty stocks like Indiabulls Real and Omaxe rose 15% and 9%, respectively. However, DLF lost 2.84%.

Asian markets ended with sharp cut barring Kospi. Hong Kong's Hang Seng lost 12.70%, after local money market rates jumped. Nikkei fell 6.36% at 7,162.90, which was the lowest closing in 26 years. Japanese Yen advanced by 1.2% to 92.6 to a dollar during the day. Philippines Index fell 12% at 1,713.8; it had triggered a temporary trading halt during the day.

Shanghai and Jakarta lost over 6.3%. Taiwan fell 4.65%. However, Kospi gained 0.82%.

Mitsubishi is going to raise USD 10.7 billion via new common shares and preferred securities.

Among the European markets, FTSE, CAC and DAX indices tumbled 3.5-6.5%, at 4:25 pm. There will be announcement of UK Nationwide housing prices.

Dow Jones and Nasdaq Futures were down at around 2.5-3%. US Treasury Secretary, Henry Paulson will give speech today. There will be announcement of US new home sales data for September.

Market Snapshot

New 2008 lows: Sensex hits a new low of 7697.3; Nifty hits a new low of 2252.7

Smart Recovery from the lows: Sensex recovers 812 points from days low, Nifty recovers 271 points from days low

Sensex closes down 191 points to close at 8509; Nifty closes down 60 points to close at 2524

Mid Cap & Small Cap Index underperforms the market; CNX mid cap down 4.4%, Bse Small Cap down.5%

Bse Realty up 4.2%, recovers 20% from days low , Unitech up 37.5%, Indiabulls Real Estate up 17%,

Bse Oil & Gas up 0.75%, recovers 13% from days low, Reliance up 5.6%, Cairn down 16.4%

Bse Auto down 6.6%, Tata Motors down 13.9%, M&M down 12.8%, Maruti down 4.1%

Bse cap goods down 4.4%, L&T down 5.8%, Punj Lloyd up 10.3%

Bse Bankex down 4.2%, Sbi down 9.6%, HDFC down 6.8%, Hdfc bank down 4.1%, Bank India down 9.5%

Index Losers : Tata Power down 9.8%, ONGC down 7%, Reliance power down 6.9%, HUL down 6.5%, ITC down 6.2%

Index Gainers : Ambuja up 10.3%, Idea up 7%, Bharti up 5.1%

Mid Cap Losers : Jindal stainless down 37.7%, Glenmark down 20%, Krbl down 20%, ABG Ship down 19.3%, Brigade down 16%

Mid Cap Losers : IOB down 15.8%, Kingfisher Airlines down 15.3%, Jet Airways down 15.3%, Videocon Ind down 13.3%, GSPL down 13.3%, Aban down 13.2%

NSE Adv : Decline at 1:5, recovers in the last session

Total market turnover at Rs 59015.60 crore versus Rs 67895.45 crore

NSE F&O Turnover at Rs 46002.30 crore versus Rs 52476.62 crore

F&O Snapshot:

Lackluster Rollovers: Nifty Rollover at 47.1%, Market Wide Rollover at 43.9

Nifty OI PCR at 0.66, IV rises Further

Nifty nov adds 62.6 lakh shares, Nov Fut ends at a discount of 4.2 points, Oct at a mild premium of 1.8%

Educomp trading at 200 point discount; ((SEBI Asks FIIs To Reverse Positions In Educomp, RPL FII Lending Data Oct 20))

A bit of short covering seen in Index Heavyweight

Index Heavyweight Rollovers:

Reliance Ind 43.3%

SBI 42.4%

Infosys 51.5%

Bharti 34%

Ntpc 45%

Icici Bank 59.4%

Options Activity:

Nifty Nov 3000 call adds 1.9 lakh shares

Nifty Oct 4100 Put adds 1.1 lakh shares

Nifty Oct 3000 put sheds 3.9 lakh shares

Asia Tumbles

Hang Seng down 12.7%,

Thailand down 10.5%,

Strait Times down 8.3%,

Nikkei down 6.3%

Global News

Japan Govt calls for Market – Stabilization measures

Bank of Korea cuts rate by 0.75 points to 4.25% after an emergency board meeting.

G7 says Yen volatility bad for economy, financial stability

Markets @ 2:51 pm : Mkts off day's low; RIL, Rel Infra, Bharti, SAIL gain

Markets have shown smart recovery in last one hour of trade, but are still trading lower. A little bit of volatility is witnessing by these indices. Buying is seen in Reliance Industries, Bharti Airtel, ICICI Bank, Unitech, SAIL, Ambuja Cements, Idea Cellular, Sterlite Industries, ABB, Reliance Infrastructure, BHEL and Cipla. However, selling continues in ONGC, SBI, HUL, Wipro, NTPC, Tata Power, M&M, Cairn India, Reliance Communication, ITC, L&T, DLF, TCS, HDFC Bank, HDFC and Power Grid.

The Sensex fell 307 points to 8,393 and the Nifty lost 96 points to 2,487, at 2:51 pm. BSE Midcap and Small Cap indices lost over 6% each. Both frontline indices have recovered over 700 points and 200 points, respectively.

Market breadth is in favour of declines; about 512 shares have advanced while 2496 shares have declined. Nearly 182 shares are unchanged.

BSE FMCG, Auto, Bankex, Capital Goods, Metal and Power indices lost 4-6%. IT fell over 3%.

Markets @ 2:27 pm : Mkts plummet; ONGC, SBI, NTPC, Rel Comm top draggers

The benchmark indices are still under pressure, despite showing smart recovery from day's low. The Sensex has clawed back above 8000 mark and the Nifty turned back above 2300 level. Global indices are also trading sharply lower, which are putting pressure on our markets.

The panic selling continues, as Asian markets collapsed. Relentless selling pressure from European fund continues. Dealers say that investors are liquidating stocks in panic. Bank and capital goods stocks continue to be under selling pressure. Portfolio stocks are being sold in panic. However, DIIs are nibbling at lower levels.

The Sensex fell 618 points to 8,082 and the Nifty lost 200 points to 2,383, at 2:27 pm. BSE Midcap and Small cap indices tumbled over over 7% each.

Market breadth is still weak; about 443 shares have advanced while 2564 shares have declined. Nearly 183 shares are unchanged.

Buying is seen in Bharti Airtel, Idea Cellular, Unitech, Ambuja Cements, Cipla and GAIL. However, top draggers are ONGC, SBI, NTPC, Reliance Communication, ITC, Wipro, L&T, HDFC Bank and TCS.

Suzlon Energy has suspended its rights issue of Rs 1800 crore. After this news, the stock had come back in the green and jumped over 8%. But immediately renewed selling pressure hammered the stock again.

On the global front, Asian markets closed sharply lower. Hang Seng tanked 12.7%. Shanghai, Jakarta and Nikkei fell over 6%. Taiwan lost 4.65%.

Among the European markets, FTSE fell 4.2%. DAX and CAC lost 3.86% and 6.04%, respectively.

Markets @ 1:15 pm : Sensex slips below 8000

Bears have charged up. Sensex has broken another psychological mark of 8000 and Nifty slipped below 2300 level as well. Metal, FMCG, power, capital goods, banking, realty, IT and oil stocks collapsed like a pack of cards.

The Sensex lost 971 points at 7729 and Nifty fell 320 points to 2,264, at 1:15 pm. Sensex has fallen 62% in 198 days while lost 40% in the month of Ocober (Fallen from 13,203 to below 8000 in October), and is trading at lowest levels since October 2005.

Chetan Ahya, Managing Director of Morgan Stanley, feels economies will take more time to come out of the global recession. The recession, he said, will take long to get over, and can last for as much as two years. As real economy comes under pressure, we will see rise in non-performing loans, he said, adding that credit markets will recover only once the recession is closer to an end. Ahya added the current account deficit and strong credit growth compounds problems.

The BSE Metal and FMCG indices plunged over 11%. Realty and Power indices fell over 10%. Bankex, Capital Goods, Oil & Gas, IT, TECK and Auto indices lost 7.5-10%. Midcap and Small cap indices crashed over 7% each.

Among the frontliners, Wipro, Grasim, ONGC, Jaiprakash Associates, HUL, Siemens, Power Grid Corp and BPCL fell 14-18%. Zee Entertainment, NALCO, Cairn India and DLF crashed 21-24%.

Daryl Guppy, Founder and Director,, sees the Nifty support at 2,200 and below that at 1,500. For the Sensex, he sees next support at 7,500 and below that at 6,000."

FIIs sold equities worth Rs 12,084 crore month till date. However, DIIs invested Rs 9,232 crore, out of which MFs invested Rs 628 crore.

The Indian Rupee is trading above 50 to a dollar. Ahya said the issue of exchange rates remains a key challenge to emerging markets, adding that he sees rupee depreciating to lows of Rs 54-55 per dollar in five or six months.

On the global front, Dow, Nasdaq and S&P 500 futures are trading lower by 3.5-4%.

Among the Asian markets, Hang Seng lost nearly 13%. Shanghai, Jakarta and Nikkei fell 6-7%. Taiwan lost 4.65%.

Markets @ 12:22 pm : Nifty struggles @ 2400; Bank, metal, FMCG stocks crash

The selling in power, metal, banking, FMCG, capital goods and technology stocks is putting pressure on the benchmark indices. Both frontline indices are down over 5% each. Asian markets are trading lower by 4-6% barring Kospi.

The Sensex tumbled 594 points to 8,106 and the Nifty fell 198 points to 2,385, at 12:22 pm. BSE Midcap and Small Cap indices lost around 6% each.

The market breadth is weak; about 566 shares have advanced while 2430 shares have declined. Nearly 194 shares are unchanged.

Sandeep Bhatia, Executive Director and Head – Sales, Kotak Institutional Equities, believes that most of the pain in financials is over, but the real economy is still in trouble. He sees Sensex bottom at 8000 levels, based on FY09 EPS of Rs 900. He said the markets will stay ranged till real economy bottoms out.

Among the frontliners, Wipro, Tata Power, DLF, SBI, NTPC, Cairn India, NALCO, Power Grid Corp, Zee Entertainment, ABB, HUL, Siemens, Reliance Power, Hindalco, BPCL and Reliance Communication slipped 10.5-19%.

BSE Metal, FMCG, Power, Capital Goods and Bankex plunged 7-9%. IT, Realty, Auto, Oil & Gas and TECK indices fell 5-6%.

Among the midcap stocks, Mahindra Life, Allcargo Global, Bombay Rayon, Advanta, Brigade Enterprises, JSL and Motilal Oswal lost 19-21%.

In the small cap space, ABG Infralogistics, Bhagwati Banquet, Dolphin Offshore, Ahluwalia, Sanghi Ind and Subhash Project tanked 19-20%.

Markets @ 11:16 am : Mkts under pressure; SBI, ONGC, NTPC, Wipro, TCS drag

The market is witnessing huge selling pressure, despite showing some bit of recovery from day's low. Banking, power, metal, technology and capital goods are taking huge beating on the bourses. Midcap and small cap stocks are under pressure.

The panic selling from local players continues today as well. The European funds continue to be seller across the region. Domestic institutional investors are not very active in early trade. Bank and capital good stocks are under pressure.

Daryl Guppy, Founder and Director,, sees the Nifty support at 2,200 and below that at 1,500. For the Sensex, he sees next support at 7,500 and below that at 6,000. "

The Sensex lost 473 points to 8,227 and the Nifty fell 167 points to 2,420, at 11:16 am. The BSE Midcap Index plunged 5.61% to 2,921 and the Small Cap fell 5.5% to 3,461.

Among the frontliners, Cairn India tumbled nearly 26%. Wipro, Tata Power, DLF, TCS, SBI, NTPC, NALCO, ABB, Power Grid Corp, Siemens, HUL and BPCL slipped 10-19%.

The market breadth is in favour of declines; about 569 shares have advanced while 2424 shares have declined. Nearly 197 shares are unchanged.

The BSE Power, Metal and Bankex crashed over 7.5% each. Capital Goods, IT, FMCG and Healthcare indices fell 5-6%. TECK, Oil & Gas, Auto and Realty indices lost 3.5-4.5%.

However, top gainers are Unitech, Suzlon Energy and Idea Cellular.

Markets @ 10:43 am : Nifty slips below 2400; bank, power, metal, CG stks crash

The market has drifted further, as banking, power, metal, capital goods, pharma and FMCG stocks are under pressure. Midcap and small cap stocks are following the same trend. The Nifty is trading below 2400 mark.

The Sensex tumbled 560 points to 8,140 and the Nifty fell 194 points to 2,389, at 10:43 am. Midcap and Small Cap indices have lost 4-5%.

NTPC (-8.4%), SBI (-11%), ONGC (-5.7%), TCS (-8.2%), HDFC Bank (-7.75%), Cairn India (-14%), SAIL (-9.4%), Power Grid Corp (-11%), DLF (-7.6%), L&T (-6.72%), HDFC (-8.16%), Tata Power (-13%) and ICICI Bank (-5.73%) are biggest contributors to this fall.

Market breadth is weak; about 642 shares have advanced while 2345 shares have declined. Nearly 203 shares are unchanged.

However, gainers are Suzlon Energy (5.6%), Unitech (33.55%) and Idea Cellular.

The BSE Bankex plunged 7.2%. Power Index fell 6.5%. Metal, Capital Goods, Healthcare and FMCG indices lost 4-6%. Auto, IT and Oil & Gas indices fell 2-3.4%.

Abhijit Chakraborty of Edelweiss Capital feels that the process of de-leveraging is still on. Many hedge funds — including India-dedicated long-offshore funds — are facing redemption-led pressures and it will not be a surprise if some funds close down before the end of the year, he said.

Markets @ 10 am: Nifty tests 2500 in early trade

The market has opened sharply lower on the back of negative global cues. However, it has immediately managed to trim losses due to buying in technology, selective oil and realty stocks. The 50-share NSE Nifty touched 2500 in early trade. The selling is seen in pharma, banking, power and FMCG stocks.

At 10:00 am, the Sensex fell 83 points to 8,617 and the Nifty lost 28 points to 2,555. CNX Midcap 100 lost 43 points to 3,367.

DLF, HDFC Bank, Sterlite Industries, Ranbaxy Labs, Reliane Infrastructure, Reliance Power, Nalco, TCS, M&M and Wipro are losers.

Unitech went up over 30% and is the top traded counter on the exchanges. It had lost over 50% on Friday.

Asian markets are trading lower. Hang Seng and Taiwan went down 5.5% each. Jakarta fell 6.8%. Kospi lost 1.5% and Shanghai fell 3.6%. Nikkei went down 0.4%.

The crude is trading at 16-month lows. OPEC has cut 1.5 million barrels per day (bpd) to 27.308 million bpd, which will be effective from November 1. OPEC said that the global demand declined for the first time in 15 years and will stagnate in 2009. It is hovering around USD 63-64 to a barrel.

The US markets had closed with substantial losses but the extent of the fall was far less than what was initially feared. At that point, the Dow was down 5.8% and the Nasdaq fell 6.9% to a new five-year low. Dow plunged 312.30 points, or 3.59%, to 8,378.95. The S&P 500 index slipped 31.34 points, or 3.45%, to 876.77, and the Nasdaq composite index lost 51.88 points, or 3.23%, to 1,552.03.

Market cues:

FIIs net sell USD 86.1 million in equity

MFs net sell Rs 80.7 crore in equity

F&O cues:

NSE F&O Open Int down Rs 2,241 cr at Rs 67,566 crore

Futures Open Int down by Rs 3,265 cr, Options Open Int up by Rs 1,024 crore

Nifty Oct Futures shed 20 lakh, Nov Futures add 40 lakh shares in Open Int

Nifty Oct at 24-pt discount, Nov at 38-pt discount

Nifty OI Put-Call ratio at 0.66 Vs 0.71

Nifty Puts OI unchanged, Calls add 43.6 lakh shares in Open Int

Nifty Oct 2800 Put adds 6 lakh shares in Open Int, premium at Rs 264

Nifty Nov 2800 Put adds 5 lakh shares in Open Int, premium at Rs 401

Nifty 3100 Put sheds 5.7 lakh shares in Open Int, premium at Rs 528

Nifty 2900 Put sheds 4 lakh shares in Open Int, premium at Rs 355

Nifty 2800 Call adds 17 lakh shares in Open Int, premium at Rs 38

Nifty 2900 Call adds 7 lakh shares in Open Int, premium at Rs 22

Stock Futures shed 3.7 cr shares in Open Int