Market melts in global heat

Weak Asian markets cast their shadow on the Indian bourses today. Selling pressure was witnessed in consumer durables, IT, metal and auto stocks.

An unexpected contraction in the service sector in the US once again sparked fears the economy may sink into recession, hitting Asian stocks.

The 30-share BSE Sensex declined 523.67 points or 2.81% at 18,139.49. Sensex hit a high of 18,274.15 in mid-morning trade. At the day's high, Sensex was down 389.01 points. Sensex touched a low of 17,936.01 in initial trade. At day’s low it shed 727.15 points.

The broader CNX S&P Nifty was down 161.35 points or 2.94% at 5,322.55.

The BSE Mid-Cap index was down 1.25% at 7,970.74, while the BSE Small-Cap lost 0.52% at 10,412.81.

The market breadth was weak: on BSE 1,298 advanced as compared to 1,484 that declined. 31 stocks remained unchanged. 28 out of 30 Sense stocks were in red.

BSE clocked a turnover of Rs 6289 crore compared to Tuesday (5 February 2008)'s Rs 5340 crore.

Nifty February 2008 futures were at 5280, at a discount of 42.55 points as compared to spot closing of 5322.55.

The NSE's futures & options (F&O) segment turnover was Rs 42,234.95 crore, which was higher than Rs 31,121.35 crore on Tuesday, 5 February 2008.

BSE IT index (down 5.59% to 3,813.82), BSE Consumer Durables index (down 4.55% to 4,943.30), BSE Metal index (down 3.6% to 16,189.46) underperformed Sensex

BSE Auto index (down 2.48% to 4,900.05), BSE Bankex (down 2.26% to 10,690.01), BSE Capital Goods index (down 2.07% to 16,571.65), BSE FMCG index (down 2% to 2,189.40), BSE Healthcare index (down 1.33% to 3,719.22), BSE Oil & Gas index (down 2.23% to 11,160.83), BSE Power index (down 1.82% to 3,880.65) and BSE Realty index (down 2.4% to 10,415.09) outperformed Sensex.

Today’s sharp fall on the bourses was despite a boost in liquidity in the secondary markets as investors have started getting refund of excess application money in Reliance Power IPO. It, however, remains to be seen how much money from Reliance Power IPO refunds actually comes to the secondary market in the light of immense volatility witnessed on the bourses last month.

Reliance Power, which raised a record $3 billion in its initial share sale in January 2008, said on Friday, 1 February 2008, it had begun refunding excess application money to investors. The initial public offer had received bids for $190 billion.

Software services exporters declined for a second day in a row due to a gloomy economic outlook in the United States, which contributes to more than half of their revenue. Satyam Computer Services (down 6.74% to Rs 408.65), Wipro (down 6.45% to Rs 425), Infosys (down 6.25% to Rs 1,510.60) and Tata Consultancy Services (down 5.15% to Rs 900.55) edged lower.

Metal stocks declined. Sterlite Industries (down 5.77% to Rs 788.05), National Alluminium Company (down 5.75% to Rs 390.05), Hindalco Industries (down 4.89% to Rs 173.05), Steel Authority of India (down 4.9% to Rs 221.15) and Tata Steel (down 2.24% to Rs 799.45) edged lower.

Consumer Durables stocks declined. Rajesh Exports (down 9.48% to Rs 136), Titan Industries (down 8.07% to Rs 1,144.20), Videocon Industries (down 3.47% to Rs 430.85) and Blue Star (down 1.97% to Rs 485) edged lower.

Auto stocks skidded. Maruti Suzuki India (down 4.83% to Rs 830.25), Tata Motors (down 2.55% to Rs 736.25), Bajaj Auto (down 2.69% to Rs 2,339.45), Mahindra & Mahindra (down 2.42% to Rs 664.05) and Hero Honda Motors (down 1.31% to Rs 717.25) edged lower.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries fell 2.44% at Rs 2,552.05. As per reports, Reliance Industries (RIL) two wells in D6 block in the Krishna Godvari (KG) basin have hit a technical snag. The loss to wells runs into about $175 million. RIL executive, however, said the snags have been rectified and that the problems would not delay production of natural gas from the D6 block.

India’s largest private sector bank by assets ICICI Bank fell 3.11% to Rs 1,152.85.

India’s largest engineering & construction firm by revenue Larsen & Toubro fell 1.93% to Rs 3,780.60.

India's second largest power utility firm by revenue Reliance Energy rose 2,056.35.

Reliance Communications rose 0.68% to Rs 681.60. Reliance Communications (RCom) is reprotedly set to test-launch its direct to home (DTH) services Big TV this week, before a full commercial launch in March this year. According to reports, the company is investing $250 million in the first phase for the launch and has already placed orders for over 2 million set-top boxes to cater to the launch. The target is to get 50% share of the new customers who join the DTH club.

Reliance Natural Resources clocked highest volume of 4.69 crore shares on BSE. Ispat Industries (3.4 crore shares), Nagarjuna Fertilisers and Chemicals (2.45 crore shares), IFCI (2.06 crore shares) and Tata Teleservicess Maharashtra (1.51crore shares) were other volume toppers on BSE in that order.

Reliance Natural Resources clocked the highest turnover of Rs 735.65 crore on BSE. Reliance Petroleum (Rs 243.13 crore), Reliance Energy (Rs 242.65 crore), Reliance Capital (Rs 239.09 crore) and Reliance Communications (Rs 210.65 crore) were other turnover toppers on BSE in that order.

In Asia, key indices in Hong Kong, Japan and Singapore were down by 3.5% to 5.40%. Stock markets in South Korea, Taiwan, and China were closed for the Lunar New Year holidays.

European markets turned strong after weak opening. France’s CAC 40 (up 0.47% to 4,799.22), Germany’s DAX (up 0.26% to 6,782.61) and UK’s FTSE 100 (up 0.08% to 5,872.70) edged higher.

US stocks suffered their biggest drop in nearly a year on Tuesday, 5 February 2008, after data showed the worst monthly contraction in the services sector since the last US recession and Standard & Poor's warned it could cut bank credit ratings.

The Dow Jones industrial average plunged 370.03 points, or 2.93%, at 12,265.13. The Standard & Poor's 500 Index lost 44.18 points, or 3.2%, at 1,336.64. The Nasdaq Composite Index tumbled 73.28 points, or 3.08% at 2,309.57. The Dow and S&P 500 had their biggest drops since 27 February 2007.

Oil prices extended their decline to hover at $88 a barrel as the weak US economic data reinforced fears that the world's largest economy is on the brink of a recession.