Weekly Close - Sensex tumbles 1,814 points

US recession fears hit markets across the globe as US market slumped. Citigroup posted first-ever quarterly loss and disappointing US holiday shopping numbers fueled fears that the world’s largest economy was heading into a recession. Pessimism about the US economy further mounted after Intel Corp the world's largest chip maker, posted earnings and a profit forecast that disappointed investors. Sensex declines all the five trading sessions in the week.

The initial batch of Q3 December 2007 results announced by corporate India was more or less in line with market expectations. Meanwhile, the mega initial public offer (IPO) of Reliance Power received an overwhelming response. The IPO ended on 18 January 2008.

BSE Sensex tumbled 1,813.75 points or 8.71% to 19,013.70 in the week ended 18 January 2008. S&P CNX Nifty declined 494.8 points or 7.98% to 5,705.30 in the week.

BSE Mid-Cap index declined 544.77 points or 5.77% to 9,893.71 in the week. BSE Small-Cap index slipped 533.57 points or 4.2% to 12,160.45.

The market ended a volatile session in the red with Sensex losing 99.40 points or 0.48% to 20728.05 on Monday, 14 January 2008. Index heavyweights ICICI Bank and Infosys Technologies drifted lower. The market breadth was positive.

Despite a strong response to the Rs 11000-crore IPO of Reliance Power (RPower), the market fell sharply with 30-share BSE Sensex shedding 476.96 points or 2.30% to 20,251.09 on Tuesday,15 January 2008 as heavyweights faced selling pressure. Bharti Airtel, Reliance Energy and ICICI Bank slumped. All the sectoral indices on BSE were in red. Banking, FMCG and power stocks were worst hit in the fall.

The Sensex lost 382.98 points or 1.89% to 19,868.11 on 16 January 2008 as the prospects of a recession in the United States triggered a sell-off in the global markets. The market remained subdued for the day although it made some recovery from its lows in the late trade. The market breadth was weak.

The market slipped for the fourth straight session with Sensex declining 167.29 points or 0.84% to 19,700.82 on Thursday, 17 January 2008, giving up early gains as index heavyweights Reliance Industries (RIL) and ICICI Bank declined. RIL dipped after it reported Q3 December 2007 results, which were boosted by one-off gains. The market breadth was strong.

Sensex plunged 687.12 points or 3.49% to 19,013.70 on Friday, 18 January 2008, in a broad-based decline.. Reliance Industries (RIL), ICICI Bank and DLF, plunged. All the sectoral indices on BSE were in the red. BSE oil & gas and realty indices were the worst hit in the fall. Small-caps and mid-cap stocks sank.

India's second largest power utility by revenue Reliance Energy declined 14.56% to Rs 2,124.05, in the week. The company’s net profit rose 50% to Rs 301.60 crore on 1.5% decline in sales to Rs 1,505.49 crore in Q3 December 2007 over Q3 December 2006. India's biggest ever share offer, from Reliance Power to raise about Rs nearly $3 billion, received an overwhelming response. The initial public offering (IPO) of Reliance Power owned by Indian tycoon Anil Ambani was fully subscribed within 60 seconds of its opening on Tuesday 15 January 2008.

India’s largest real estate player by market capitalisation DLF declined 15.91% to Rs 1,005.75. The company signed a memorandum of understanding with Gayatri Projects to form a joint venture company for constructing road projects on build-operate-transfer basis. Gayatri Projects and its associates will hold 50% stake and DLF and its associates will hold the balance 50% in the joint venture.

India’s largest IT exporter by sales Tata Consultancy Services slipped 8.56% to Rs 904.40. The company posted 2.77% rise in net profit to Rs 1,178.99 crore on sales rise of 5.62% to Rs 4,834.47 crore in Q3 December 2007 over Q2 September 2007.

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) tumbled 10.51% to Rs 2,799.50. The company’s net profit rose 162.2% to Rs 8,079 crore on 22.7% rise in sales to Rs 34,590 crore in Q3 December 2007 over Q3 December 2006. The net profit was boosted by one-off gains.

Meanwhile, RIL said it discovered gas in the Krishna Godavari offshore basin on the east coast of India. This is the company’s third gas discovery in the block. RIL holds 100% participating interest in this block and has christened the discovery as Dhirubhai-38.

India’s top cellular services provider in terms of market share Bharti Airtel slumped fell 9.51% to Rs 873.90 on sustained selling pressure after rival firm Reliance Communications was allocated Global System for Mobile communications spectrum in 14 circles in India on Friday, 11 January 2008. Bharti Airtel currently operating in 22 telecom circles and was granted additional spectrum in two circles.

India's largest drug maker by sales Ranbaxy Laboratories lost 2.2% to Rs 386.65. The company’s net profit declined 65.2% to Rs 48.40 crore on 1.2% decline in sales to Rs 993.32 crore in Q4 December 2007 over Q4 December 2006.

Tata Steel declined 8.36% to Rs 781.9. The company said it has entered into a joint venture agreement with Al Bahja Group for the development of Uyun limestone deposits at Salalah in the Sultanate of Oman. Tata Steel will be holding 70% stake in AL Rimal Mining LLC through its subsidiary, TS Global Minerals Holdings. Al Rimal Mining LLC will execute the project of developing and operating the Uyun Mine.

India’s largest dedicated housing financing firm by operating income HDFC declined 7.87% to Rs 2,819.80. HDFC’s net profit rose 82.5% to Rs 648.93 crore on 56% rise in total operating income to Rs 2,275.66 crore in Q3 December 2007 over Q3 December 2006. The net profit was boosted by one-off gains.

India's third-largest software services exporter Wipro declined 6.3% to Rs 455.35. The company reported 3.69% rise in net profit on a consolidated basis to Rs 854 crore on 11.04% rise in total income to Rs 5433.20 crore in Q3 December 2007 over Q2 September 2007.

ICICI Bank (down 13.5% to Rs 1,245.45), Infosys (down 7.33% to Rs 1.464.35) and Larsen & Toubro (down 5.87% to Rs 3,930.10) were other major losers from Sensex pack in the week.

The market regulator Securities and Exchange Board of India (Sebi) on Friday, 11 January 2008, gave its go-ahead for the launch of long duration options on the popular Sensex and Nifty indices with tenures up to three years. At present maximum duration for any futures & options contract is three months.

Sugar production in India is likely to fall to 26 million tonnes in the year to September 2008, nearly 12% less than earlier forecasts due to lower yield from sugarcane, Agriculture Minister Sharad Pawar said on Wednesday, 16 January 2008. Low price expectations discouraged farmers to use fertiliser and sugarcane yield is low this time, leading to lower output, Pawar said.

Indian Trade Minister Kamal Nath on Monday, 14 January 2008, urged China to relax its policy on coking coal exports, which he said was putting India's steel industry at an unfair disadvantage. Nath said India was exporting iron ore to China at an export duty realisation of just 1%, have lowered this duty at China’s request and it is now for the Chinese side to reciprocate in the area of coking coal.

Prime Minister Manmohan Singh met Chinese leaders in Beijing on 14 January 2007. The two nations sought to strengthen economic ties and put aside a lingering border dispute. The minister pressurised China to address their bilateral trade imbalances. Bilateral trade rose 56% to US$ 38.6 billion in 2007 over a year. Singh and his Chinese counterpart Wen Jiabao pledged to raise the figure to US$ 60 billion by 2010.

The market regulator Securities & Exchange Board of India (Sebi) has proposed a 25% first-day price band for IPOs up to Rs 250 crore, to enable steady and sustained price discovery over a period of time. Sebi has invited public comments on the imposition of circuit filters on the first day of listing of shares. At present, stock exchanges do not impose price bands on the day of listing of IPOs. And, after the day of listing, there is a regular price band of 20%.

Annual inflation, based on the wholesale price index (WPI), moved up 3.79% in the week ended 5 January 2008 compared with 3.5% in the week ended 29 December 2007. The market estimate stood at 3.55%.