Weekly Wrap - Jan 25 2008

During the week ended Jan. 25, 2008 the broad based Sensex fell 652.04 points and Nifty declined 321.95 points.

On Monday (Jan. 21, 2008), the 30 share index, Sensex witnessed the biggest ever fall in history of Indian market. The index opened with a negative gap of 94 points and continued to trade weak throughout the day. Relentless selling pressure was seen among the traders in frontline stocks.

BSE Sensex tumbled 1,408.35 points, or 7.41%, to close at 17,605.35 while the broad-based NSE Nifty closed at 5,208.80, down 496.5 points, or 8.70%.

On Tuesday (Jan. 22, 2008), the BSE Sensex opened with a negative gap of 721 points at 16,884. The index was down 9.8%, or 1,716 points, at 15,889. The NSE Nifty crashed over 12%, or 630 points, to 4,578 in the initial trading hour. The trading was suspended for one hour as a result of 10% lower circuit. The Indian markets again broke all the important technical and psychological levels.

BSE Sensex tumbled 875.41 points, or 4.97%, to close at 16,729.94 while the broad-based NSE Nifty closed at 4,899.30, down 309.5 points.

On Wednesday (Jan. 23, 2008), the BSE Sensex opened with a positive gap of 685 points at 17,415.26 on the back of 75 basis points rate cut by the US Federal Reserve.

The index continued to trade strong in the subsequent trading hours and by later half it gained more than 1,000 points on back of sustained buying interest across board, after the stock prices valuation came to an attractive level.

BSE Sensex gained 864.13 points, or 5.17%, to close at 17,594.07 while the broad-based NSE Nifty closed at 5,203.40, up 304 points.

On Thursday (Jan. 24, 2008), the 30-share index, BSE Sensex opened with a positive gap of 327 points at 17,920.98. The index traded strong on back of intense buying interest in the frontline stocks among investors in the early sessions of trade. The index however lost all its firmness on account of profit booking at higher levels.

BSE Sensex lost 372.33 points, or 2.12%, to close at 17,221.74; while the broad-based NSE Nifty closed at 5,033.45, down 169.95 points.

On Friday (Jan. 25, 2008), the 30-share index, Sensex opened with a positive gap of 282.26 points at 17,504.00. The index traded strong on back of intense buying interest in the frontline stocks and global cues.

BSE Sensex gained 1,139.92 points, or 6.62%, to close at 18,361.66; while the broad-based NSE Nifty closed at 5,383.35, up 349.9 points.

Corporate Results

Oil & Natural Gas Corporation (ONGC) registered a fall of 6.46% in net profit to Rs 43,665.40 million for the quarter ended December 2007 as compared with Rs 46,683.10 million in the corresponding quarter, last fiscal. Total income for the quarter dipped 1.75% to Rs 159,838.10 million from Rs 162,690.10 million in the corresponding quarter, last year.

IT major, Satyam Computer Services on Consolidated basis (as per Indian GAAP), posted a 28.59% jump in net profit at Rs 4,336.30 million for the quarter ended December 2007 as compared to Rs 3,372.30 million for the quarter ended December 2006. Total Income has increased 35.59% to Rs 22,660.50 million for the quarter ended December 2007 from Rs 16,712.90 million for the quarter ended December 2006.

Kotak Mahindra Bank reported a jump of 2.14 times in consolidated earnings in the quarter ended Dec. 31, 2007, to Rs 3,637.33 million compared with Rs 1,695.77 million in the the same quarter, last year. The consolidated total income for the quarter surged 2.08 times to Rs 24,827.16 million compared with the corresponding quarter, a year ago.

Grasim Industries registered a rise of 34.55% in earnings in the quarter ended Dec. 31, 2007, to Rs 5,537.90 million compared with Rs 4,115.80 million in the previous year period. The earnings per share (EPS) for the quarter climbed 34.53% to Rs 60.39 compared with Rs 44.89 in prior year period.

Chennai Petroleum Corporation disclosed a phenomenal jump in net profit for the quarter ended December 2007. During the quarter, the company experienced a 9.27 times rise in profit to Rs 2,256.20 million from Rs 243.50 million in the quarter ended December 2006. Total income rose 20.11% to Rs 71,029.90 million for the quarter ended December 2007 from Rs 59,137.60 million for the same period, last year.

Iron ore exporter Sesa Goa reported a phenomenal 2.53 times jump in net profit to Rs 4,927.08 million for the quarter ended December 2007 as compared with Rs 1,949.38 million in the corresponding quarter, last fiscal. Total income for the quarter surged 98.20% to Rs 11,889.16 million from Rs 5,998.48 million for the corresponding quarter, last year.

Bangalore-based public sector lender Canara Bank reported 26.39% increase in net profit to Rs 4,588.30 million for the quarter ended December 2007 as compared with Rs 3,630.20 million for the corresponding quarter, last fiscal. Interest income for the quarter rose 19.88% to Rs 35,501.60 million as against Rs 29,613.60 million for the same quarter, a year ago.

Leading realty player, Housing Development and Infrastructure (HDIL) reported a profit of Rs 2,702.30 million for the quarter ended Dec. 31, 2007 on total revenue of Rs 5,165.10 million. The company posted earnings per share of Rs 12.61 in the quarter ended Dec. 31, 2007.

India`s biggest lender, State Bank of India (SBI) reported a substantial rise of 56.36% in consolidated earnings in the quarter ended December 2007, to Rs 23,836.60 million compared with Rs 15,244.20 million in the same quarter, last year. The consolidated total income for the quarter jumped 43.03% to Rs 243,809.90 million compared with the corresponding quarter, a year ago.

Economy News

Inflation rose to 3.83% for the week ended Jan. 12, 2008, as against 3.79% during the previous week.

The Telecom Regulatory Authority of India (TRAI) suggested abolition of the existing practice of levying Access Deficit Charges (ADC) on private operators, a move that could hit the revenues of state-owned telecom major Bharat Sanchar Nigam (BSNL).

With a view to stop misuse of area-based exemptions, the finance ministry disallowed excise duty exemptions to firms undertaking peripheral activities in Himachal Pradesh, Uttarakhand and the North-East. Non-manufacturing units will now have to pay duty. In a notification, the government excluded such units from the benefit of area-based exemption with effect from January 18.

The total import of sensitive items increased 11.8% for the period April-November 07 to Rs 187.02 billion, as compared to Rs 167.26 billion during the corresponding period of last year.

The gross import of all commodities during same period of current year was Rs 6,123.57 billion as compared to Rs 5,446.74 billion during the same period of last year. Thus import of sensitive items constitute 3.07% and 3.05% of the gross imports during last year and current year respectively.