Sensex hits 6-month low

Winds of turbulence originating in the United States pushed the Indian market down to a six-month low last week. The sub-prime mortgage crisis in the United States has resulted in the drying of liquidity around the world. The spillover effect was seen across all emerging markets in Asia and India was not an exception.

Continued flow of negative news pertaining to global economy kept the market depressed and volatile. The developments on the domestic front only added to the concerns. A surge in inflation coupled with lower-than-expected industrial production data negatively surprised the markets.

The 30-share BSE Sensex lost 215 point or 1.35% to 15,760.52 in the week ended Friday, 14 March 2008. The broader CNX S&P Nifty shed 25.8 points or 0.54% to 4745.80 in the week.

The BSE Mid-Cap lost 220.94 points or 3.25% to 6,583.45 and the BSE Small-Cap index slipped 329.68 points or 3.92% to 8,079.50.

The two niche indices, BSE Sensex and S&P CNX Nifty, saw divergent trend on 10 March 2008 with the later posting gains helped by spurt in non-Sensex constituents viz. Reliance Petroleum and Cairn India. The 30-share BSE Sensex was down 51.80 points or 0.32% at 15,923.72. The broader based S&P CNX Nifty was up 28.80 points or 0.60% at 4,800.40.

Local markets managed to post decent gains in choppy trade on 11 March 2008 boosted by steady buying demand for index pivotals and short covering at lower level. The 30-share BSE Sensex gained 199.43 points or 1.25% at 16,123.15. The broader based S&P CNX Nifty advanced 65.50 points or 1.36% at 4,865.90.

On 12 March 2008, the market erased almost entire gains in contrast to strong start after disappointing industrial production figures for January 2008 hit the market in early afternoon trade. The US Federal Reserve’s move to inject up to $200 billion of liquidity into strained credit markets triggered rally across Asian and European markets. The 30-share BSE Sensex was up marginally by 4.83 points or 0.03% at 16,127.98. The broader based S&P CNX Nifty rose 6.10 points or 0.13% at 4,872.

A major setback was witnessed on the bourses on 13 March 2008 as share prices fell almost across the board. Markets across the globe dropped amid concerns about the effectiveness of the Federal Reserve's efforts to aid strained credit markets. The 30-share BSE Sensex slumped 770.63 points or 4.78% at 15,357.35. Sensex hit a low of 15,228.99 in late trade, its lowest level since early September 2007. The broader based S&P CNX Nifty was down 242.40 points or 5.10% at 4,623.60.

Buying in battered pivotals triggered solid rally on the bourses in late trade, with market closing near highest point of the day on 14 March 2008. However, the market breadth, indicating the overall health of the market remained negative. The 30-share BSE Sensex surged 403.17 points or 2.63% at 15,760.52. The broader based S&P CNX Nifty advanced 122.20 points or 2.64% at 4,745.80.

India's largest private sector bank by assets ICICI Bank slipped 1.63% to Rs 878.20.

NTPC, the country’s largest power generation company in terms of sales, surged 5.47% to Rs 194.90. As per reports, the company proposes to set up a 2000-megawatt project in joint venture with Andhra Pradesh State Power Generation Corporation.

Jaiprakash Associates soared 14.21% to Rs 236.25. The stock replaced Bajaj Auto in the BSE 30-share Sensex pack with effect from Friday, 14 March 2008.

India's largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 3.24% to Rs 2321.70. Its unit Reliance Retail has signed a joint venture with Pearle Europe for the launch of a chain of optical stores in India

Bharti Airtel, the country’s top listed cellular services provider by market share rose 0.22% to Rs 752.95.

India's largest engineering and construction firm by revenue Larsen & Toubro fell 2.68% to Rs 2908. The company said on Monday, 10 March 2008, that one of its subsidiaries Larsen & Toubro International FZE may incur commodity-hedging losses, erasing last year's profit at the unit. Larsen & Toubro International FZE may post losses of as much as Rs 200 crore because it bet against a drop in prices of zinc and some other commodities.

V-Guard Industries debuted on the stock exchanges on 13 March 2008. It debuted at Rs 82.15, a premium of 0.18% over the IPO price. On that day, the stock settled at Rs 73.45 on BSE, a discount of 10.42% over the IPO price of Rs 82. V-Guard Industries, a company based in Kerala, is engaged in the manufacturing and marketing of electrical systems.

Rural Electrification Corporation (REC) debuted on the stock exchanged on 12 March 2008. It debuted at Rs 125 on BSE, a premium of 19.04% over the IPO price. On that day, the stock settled at Rs 121.30 on BSE, a premium of 15.52% over the IPO price of Rs 105. REC, a term lending institution and a government enterprise, is engaged in the business of lending to power projects.

India's industrial output rose 5.3% in January from a year earlier, slowing sharply from the previous month's upwardly revised 7.7%. Manufacturing production rose 5.9% in January from a year earlier, compared with a provisional annual growth of 8.4% in December.

Inflation based on the wholesale price index (WPI) rose 5.11% in the 12 months to 1 March 2008, higher than the previous week's rise of 5.02%, government data showed on Friday, 14 March 2008. The rate was the highest since 26 May 2007.