Weak market breadth

The market remained weak in afternoon trade on weak global cues. An unexpected contraction in the service sector in the US once again sparked fears the economy may sink into recession, hitting Asian stocks.

At 13:22 IST, the 30-share BSE Sensex was down 583.25 points or 3.13% at 18,077.91. Sensex hit a high of 18,274.15 in mid-morning trade. At the day's high, Sensex was down 389.01 points for the day. 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 182.35 points or 3.33% at 5,301.55.

The BSE Mid-Cap index was down 1.81% at 7,924.95, while the BSE Small-Cap was down 1.35% at 10,325.15.

The market breadth was weak: on BSE 963 advanced as compared to 1,726 that declined. 39 stocks remained unchanged.

Consumer Durables stocks declined. Rajesh Exports (down 8.99% to Rs 136.75), Titan Industries (down 6.4% to Rs 1,165), Videocon Industries (down 2.88% to Rs 433.50) and Blue Star (down 1.77% to Rs 486) edged lower.

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 5.98% to Rs 412), Wipro (down 5.48% to Rs 429.65), Infosys (down 5.91% to Rs 1,516.50) and Tata Consultancy Services (down 5.31% to Rs 899) edged lower.

Metal stocks extended losses in early afternoon trade. Sterlite Industries (down 6.49% to Rs 780.75), National Alluminium Company (down 5.75% to Rs 391.80), Hindalco Industries (down 4.67% to Rs 173.45), Steel Authority of India (down 4.11% to Rs 223) and Tata Steel (down 2.53% to Rs 797.10) edged lower.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries fell 2.9% at Rs 2,540.20. 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 3.01% to Rs 1,153.65.

India’s largest engineering & construction firm by revenue Larsen & Toubro fell 2.21% to Rs 3,772.

India’s largest telecom services provider by market share Bharti Airtel slumped 5.53% to Rs 884.20.

Reliance Communications declined 1.66% to Rs 665.75. 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.

In Asia, key indices in Hong Kong, Japan and Singapore were down by 3.49% to 5.40%. Stock markets in South Korea, Taiwan, and China were closed for the Lunar New Year holidays.

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.

As per provisional data, FIIs bought shares worth a net Rs 311.78 crore on Tuesday, 5 February 2008. Local funds sold shares worth a net Rs 135.16 crore on that day.

FIIs were net buyers to the tune of Rs 62.24 crore in the futures & options segment on Tuesday, 5 February 2008. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 139.06 crore and bought index options worth Rs 276.26 crore. They were net sellers of stock futures to the tune of Rs 344.24 crore and sold stock options worth Rs 8.84 crore.