Market to extend losses

Indian shares are expected to extend losses tracking selling pressures in global markets on fears of US recession.

US markets plunged more than 2% on Tuesday, 15 January 2008 after Citigroup posted first-ever quarterly loss and disappointing holiday shopping numbers fueled fears that the economy was heading into a recession. Citigroup hurt by $ 18.1 billion of write-offs due to exposure to Sub prime mortgages and other risky debt, posted a net loss of $ 9.83 billion. The bank has reduced its dividend by 41%, and cut 4,200 jobs. The stock was down 7.30%.

The Dow Jones plunged 277.04 points, or 2.17%, to 12,501.11. The Standard & Poor's 500 index slipped 35.30 points, or 2.49%, to 1,380.95, and the Nasadaq composite index fell 60.71 points, or 2.45%, closing at 2,417.59 on Tuesday, 15 January 2008.

Asian markets were trading lower today, 16 January 2008. Hong Kong's Hang Seng (down 3.27% at 24,992.60), Japan's Nikkei (down 1.78% at 13,724.23), Taiwan's Taiwan Weighted (down 1.78% at 8,278.95) ,South Korea's Seoul Composite (down 1.83% to 1,715) and Shanghai Composite (down 2% to 5,334.78) slipped.

There might be some liquidity drain from the secondary market as action might shift to primary market as the mega initial public offer (IPO ) of Reliance Power opens for subscription today, 15 January 2008. The IPO ends on 18 January 2008. Meanwhile as per reports, state-owned telcom services provider Bharat Sanchar Nigam (BSNL) reportedly plans to launch India’s biggest initial public offer to raise about Rs 40,000 crore (over $10 billion).

The 30-share BSE Sensex fell 476.96 points or 2.30% to 20,251.09 on Tuesday, 15 January 2008. The broader CNX S&P Nifty was down 132.55 points or 2.14% to 6074.25.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 365.09 crore on Tuesday,15 January 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 89.74 crore on Tuesday, 15 January 2008.