Volatility was the hallmark for the day as the market swung like pendulum in negative and positive terrain throughout the day. The market recovered from lower level in mid-afternoon trade on positive cues from European markets. The market had swung between positive and negative zone in mid-morning trade after undergoing high initial volatility. Sensex fell below 17,500 mark. Most of the Asian markets were closed today.
Emaar MGF Land became another victim of the depressed secondary market conditions as the company today withdrew its IPO due to poor response to the issue, a day after Wockhardt Hospitals on Thursday, 7 February 2008, pulled out its IPO for the same reason. Recently, volatility in the secondary market conditions had forced Emaar MGF Land to extend its initial public offer until 11 February 2008 and lower its indicated price for a second time.
The 30-share BSE Sensex declined 62.04 points or 0.35% to 17,464.89. Sensex shed 323.87 points at the day's low of 17,203.06, hit in afternoon trade. Sensex touched a high of 17,688.73 at the onset of the trading session. At day's high, Sensex surged 161.80 points.
The broader CNX S&P Nifty was down 12.9 points or 0.25% at 5,120.35.
IT stocks surged. Reliance Industries and State Bank of India came off lower level. Realty, metal and consumer durable stocks dropped. Hindustan Unilver and ITC rose. Even as the Sensex recovered, the market breadth remained quite weak.
Annual inflation based on the wholesale price index rose 4.11% in the week ended 26 January 2008 from 3.93% in the week ended 19 january 2008, government data released today showed.
The BSE Mid-Cap index was down 1.9% at 7,633.27, while the BSE Small-Cap was down 2.77% at 9,920.35.
The market breadth was quite weak: on BSE 506 advanced as compared to 2,259 that declined. 37 stocks remained unchanged. 16 out of 30 Sensex stocks were in red.
BSE clocked a turnover of Rs 6334 crore compared to Thursday (7 February 2008)'s Rs 6570 crore.
Nifty February 2008 futures were at 5,070, at a discount of 50.35 points as compared to spot closing of 5,120.35.
The NSE's futures & options (F&O) segment turnover was Rs 39,421.27 crore, which was lower than Rs 40,921.83 crore on Thursday, 7 February 2008.
BSE Auto index (down 0.88% to 4,741.49), BSE Bankex (down 2.17% to 10,159.42), BSE Consumer Durables index (down 3.2% to 4,737.15), BSE Capital Goods index (down 1.62% to 15,859.11), BSE Metal index (down 2.67% to 15,114.84), BSE Power index (down 1.23% to 3,736.31), BSE PSU index (down 0.9% to 8,275.98) and BSE Realty index (down 2.46% to 9,783.85) underperformed Sensex.
BSE FMCG index (up 2.34% to 2,175.09), BSE IT index (up 3.73% to 3,843.34), BSE Oil & Gas index (down 0.28% to 10,638.44) outperformed Sensex.
Among Sensex stocks, Hindustan Unilever rose 6.09% to Rs 211.75, ONGC rose 0.89% to Rs 997.25, ITC rose 2.47% to Rs 196.95 and Ranbaxy Laboratories rose 2.32% to Rs 382.30.
HDFC, India's biggest dedicated housing finance firm by revenue, fell 4.47% to Rs 2,796.20.
IT stocks strengthened on bargain hunting after they fell for the last three consecutive trading sessions. Infosys (up 4.76% to Rs 1,551.35), Satyam Computer Services (up 4.9% to Rs 410), Tata Consultancy Services (up 1.93% to Rs 899.95) and Wipro (up 3.07% to Rs 422.45) edged higher.
Metal stocks declined. Steel Authority of India (down 4.61% to Rs 200.60), Sterlite Industries (down 2.76% to Rs 737.55), Tata Steel (down 2.72% to Rs 750.40) and Hindalco Industries (down 1.71% to Rs 160.50) edged lower.
Banking stocks declined after the latest data showed rise in inflation. ICICI Bank (declined 3.49% to Rs 1,066.70), HDFC Bank (down 3.06% to Rs 1,445.95) edged lower. State Bank of India rose 1.68% to Rs 2,191.45. It recovered from a low of 2,150.97.
Capital goods stocks fell. India’s largest engineering & construction firm by revenue Larsen & Toubro fell 2.84% to Rs 3,527.30. It recovered from low of Rs 3,465. India's biggest power equipment maker by sales Bharat Heavy Electricals declined 0.31% to Rs 2,013.70 despite winning a contract worth Rs 3,390 crore.
India’s largest wind turbine maker by sales Suzlon Energy rose 0.88% to Rs 310.10. Suzlon Energy, through its step-down wholly owned subsidiary company, SE Drive Technik, Germany in joint venture with REpower Systems AG, Germany has established a new company Renewable Energy Technology Centre. Both the firms hold 50% stake each in the new company.
Realty stocks fell. Indiabulls Real Estate (down 4.73% to Rs 630), Housing Development Infrastructure (down 2.79% to Rs 908.25), DLF (down 3.33% to Rs 816.70) and Unitech (down 2.76% to Rs 351.05) edged lower.
Consumer durables stocks fell. Titan Industries (down 5.69% to Rs 1,061.65), Videocon Industries (down 4.71% to Rs 411.45), Rajesh Exports (down 3.39% to Rs 128.25) and Blue Star (down 3.95% to Rs 460) edged lower.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries declined 0.13% at Rs 2,421.75. It recovered from its lows of Rs 2,391.50.
India’s largest telecom services provider by sales Bharti Airtel rose 2.12% to Rs 880.80.
India’s second largest listed telecom firm by sales Reliance Communications declined 1.61% to Rs 633.70. Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will reportedly build 56,596 telecom towers by financial year 2010, increasing the total number of towers to 1 lakh.
Reliance Natural Resources clocked highest volume of 3.79 crore shares on BSE. Ispat Industries (1.54 crore shares),Reliance Petroleum (1.29 crore shares), Nagarjuna Fertilisers and Chemicals (1.24 crore shares) and IFCI (1.09 crore shares) were the other volume toppers on BSE in that order.
Reliance Natural Resources clocked the highest turnover of Rs 573.83 crore on BSE. Reliance Energy (Rs 408.07 crore), Reliance Industries (Rs 267.90 crore), Reliance Petroleum (Rs 211.76 crore) and Reliance Communications (Rs 181.71 crore) were other turnover toppers on BSE in that order.
A poor response to the IPO due to depressed secondary market conditions caused Wockhardt Hospitals to withdraw its IPO on Thursday, 7 February 2008. The IPO was subscribed just 20% by Thursday, the last day of the issue.
The Bank of England on Thursday, 7 February 2008, cut its key interest rate by a quarter percentage point to 5.25% to help shore up the economy but policymakers remained worries about inflation, dampening hopes of rapid-fire rate cuts. The European Central Bank kept euro-zone rates unchanged at 4% on the same day.
European markets were firm. Stock markets in France, Germany and UK were higher between 0.54-1.14%.
Markets in China, Hong Kong, South Korea, Singapore, and Taiwan were closed today for the Lunar New Year holiday. Japan’s Nikkei 225 average was down 1.44%.
US stocks rose on Thursday, as relatively cheap valuations tempted investors back to Wall Street after a three-day losing streak. The Dow Jones industrial average was up 46.90 points, or 0.38%, at 12,247.00. The Standard & Poor's 500 Index was up 10.46 points, or 0.79%, at 1,336.91. The Nasdaq Composite Index rose 14.28 points, or 0.63%, at 2,293.03.
Even if the US goes into the recession, it may not impact India’s economic growth in a big way given that domestic demand is a key driver of the Indian economy. India’s economy is expected to post strong growth for a long period due to favourable demographics. Moreover a healthy investment cycle will continue to support India’s growth through a self-perpetuating cycle of income creation, savings and investment.
India's economy is expected to expand at 8.7% in fiscal 2007/08, slower than 9.6% growth in 2006/07, which was its strongest pace in 18 years, government's central statistics office (CSO) said on Thursday, 7 February 2008. CSO has pegged manufacturing output growth at an annual 9.4% this fiscal compared with 12% growth in the previous year. Farm output growth is estimated at 2.6% for the full year 2007/08 compared with 3.8% growth in 2006/07. Services sector growth is estimated at 10.7% for the year against 11.1% growth in 2006/07.
Corporate earnings growth remains decent. Deutsche Bank expects 20% compounded annual growth rate in earnings of 30-Sensex firms during the period from FY 2007 (year ended 31 March 2007) to FY 2009 (year ending 31 March 2009).