Sensex tumbles to six month low; real estate, metal shares hammered

A major setback was witnessed on the bourses 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.

28 shares among the 30-member Sensex pack finished with losses. The market breadth was extremely weak. Turnover was dull. Stocks from real estate, metal and capital goods sector were worst hit.

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. At the day’s low, the Sensex lost 898.99 points.

As per provisional data foreign institutional investors sold stocks worth Rs 108.5 crore while domestic funds bought shares worth Rs 56.44 crore today, 13 March 2008.

At current 15,357.35, Sensex trades at a PE multiple of 14.62 to 15.35, based on projected FY 2009 EPS of Rs 1000-to-Rs 1050 for 30 Sensex companies.

The broader based S&P CNX Nifty was down 242.40 points or 5.10% at 4,623.60. Nifty March 2008 futures were at 4,609 a discount of 14.60 points as compared to spot closing.

European markets were weak. Key benchmark indices in United Kingdom (down 2.12% to 5,654), Germany (down 2.55% to 6,431.88), and France (down 2.31% to 4,588.44), slipped

Asian markets settled on a weak note today, 13 March 2008. Japan's Nikkei (down 3.33% at 12,433.34), Hong Kong's Hang Seng (down 4.79% at 22,301.46), Taiwan's Taiwan Weighted (down 2.66% at 8,210.99), China’s Shanghai Composite (down 2.43% to 3,971.27), Straits Times (down 3.85% at 2,805.55) and South Korea's Seoul Composite (down 2.60% at 1,615.92), edged lower.

Back home, the market breadth was weak on BSE with 2,331 shares declining as compared to 359 that advanced. 43 shares remained unchanged.

The BSE Mid-Cap index was down 5.53% to 6,527.67 while the BSE Small-Cap index slipped 5.35% to 8,075.18. Both these indices underperformed the Sensex

The total turnover amounted to Rs 5952 crore lower than yesterday’s turnover of Rs 7,215.42 crore on BSE.

Turnover on NSE’s futures & options segment amounted to Rs 44869.49 crore which was slightly higher as compared to yesterday’s turnover of Rs 44632.78 crore

All sectoral indices on BSE suffered losses. The BSE Consumer Durables index (down 7.83% to 3,872.64), the BSE Power (down 6.28% to 3,063.99), the BSE TecK index (down 4.92% to 2,875.51), the BSE PSU index (down 5.90% to 7,392.12), the BSE Metal index (down 8.38% to 14,373.96), the BSE Capital Goods index (down 5.62% at 13,309.34), he BSE Realty index (down 11.59% at 7,362.42), the BSE Oil & Gas index (down 5.83% to 10,021.97), and the BSE Bankex (down 5.59% at 8,076.80), underperformed the Sensex.

The BSE FMCG index (down 1.95% at 2,138.63), the BSE IT index (down 4.62% to 3,311.91), the BSE Auto (down 2.45% at 4,535.65), the BSE Health Care index (down 2.69% at 3,772.23), outperformed the Sensex.

Real estate shares were hammered brutally. India’s largest real estate developer by market capitalisation DLF slipped 13.29% to Rs 618. It was the top loser from Sensex pack. As per reports, the firm may delay a planned initial public offering to raise $1.5 billion from a real estate investment trust in Singapore.

Unitech (down 9.62% to Rs 266.20), Parsvnath Developers (down 8.45% to Rs 207), Indiabulls Real Estate (down 10.23% to Rs 510), were the other losers from real estate sector

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries slumped 5.23% to Rs 2252 on 12.49 lakh shares. The stock moved in a range of Rs 2201 and Rs 2355 during the day

Metal shares slumped on profit booking. Hindalco Industries (down 9.72% to Rs 173.15), Tata Steel (down 9.06% to Rs 697), Steel Authority of India (down 11.64% to Rs 192.80), and JSW Steel (down 5.44% to Rs 888.25), slipped

IT pivotals slumped on concerns of a US recession. TCS (down 7.25% to Rs 765), Satyam Computers (down 5.10% to Rs 359.90), Wipro (down 6.75% to Rs 363.55), and Infosys (down 4.63% to Rs 1320), edged lower. Indian IT firms derive more than half of their revenue from exports to US.

Banking shares slipped on selling pressure. India’s largest private sector bank in terms of net profit ICICI Bank slipped 5.67% to Rs 830 tracking weak ADR which declined 5% on the NYSE yesterday, 12 March 2008. State Bank of India (down 6.80% to Rs 1685), and HDFC Bank (down 4.37% to Rs 1308), also slipped.

Reliance Energy (down 10.95% to Rs 1183), Reliance Communications (down 7.82% to Rs 497.50), and Bharat Heavy Electricals (down 6.52% to Rs 1885), slipped from Sensex pack.

Bajaj Auto, the country’s second largest two wheeler maker in terms of sales, gained 1.49% to Rs 2124 in volatile trade. The stock moved in a wild range of Rs 1976.05 and Rs 2175. All existing futures & options contracts on the counter expired today and new contracts will be introduced on, 14 March 2008, as a demerger scheme takes effect from tomorrow, 14 March 2008.

As per the demerger scheme, the company's various businesses including auto manufacturing and other strategic businesses such as wind energy, insurance and financial services, would be demerged into two newly incorporated subsidiaries: Bajaj Holdings and Investment (BHIL) and Bajaj Finserv (BFL).

Hindustan Unilever, the country’s largest FMCG company in terms of sales, rose 0.20% to Rs 222.20

Shares of oil marketing companies declined despite reports that the government has issued a formal notification to raise the foreign direct investment (FDI) limit in public sector refineries to 49%. Hindustan Petroleum Corporation (down 2.17% to Rs 270), Bharat Petroleum Corporation (down 4.81% to Rs 408) and Indian Oil Corporation (down 4.49% to Rs 480.90). The Indian crude basket had crossed $100 a barrel mark for the first time on Monday, 10 March 2008.

Among liquid mid-cap stocks, Indiabulls Financial Services (down 15.10% to Rs 467.10), Nagarjuna Fertilizers & Chemicals (down 13.18% to Rs 36.90), Educomp Solutions (down 10.45% to Rs 3,275.30), Reliance Natural Resources (down 11.80% to Rs 103.25), Cairn India (down 11.55% to Rs 218.90), Power Grid Corporation of India (down 12.89% to Rs 90.25) and Reliance Capital (down 13.26% to Rs 1250) slumped.

Hero Honda Motors (up 1.3% to Rs 737.50), Jet Airways (up 0.59% to Rs 630.60), Exide Industries (up 0.52% to Rs 66), and CESC (up 0.16% to Rs 467.25) were the gainers

Among the side counters, Nahar Capital (down 20% to Rs 96.85), Hester Pharma (down 16.91% to Rs 125.50), Indo Borax (down 16.76% to Rs 64.05), Satra Properties (down 15.65% to Rs 72), and RS Software (down 15.23% to Rs 21.70), slumped.

However English Indian Clays (up 20% to Rs 1449.40), Compuage Infocomm (up 10% to Rs 39.05), Foods & Inns (up 7.14% to Rs 300), surged.

V-Guard Industries settled at Rs 73.45 on BSE, a discount of 10.42% over the IPO price of Rs 82. It debuted at Rs 82.15, a premium of 0.18% over the IPO price. The stock hit a high of Rs 98.90 and a low of Rs 70.70. On BSE, 1.90 crore shares were traded in the scrip.

Reliance Industries was the top traded counter on BSE with turnover of Rs 282.97 crore followed by Reliance Natural Resources (Rs 277.39 crore), Housing Development & Infrastructure (Rs 275.55 crore), Reliance Petroleum (Rs 204.45 crore) and Rural Electrification Corporation (Rs 196.30 crore) in that order.

Reliance Natural Resources led the volumes charts clocking volume of 2.59 crore shares followed by V Guard Industries (1.90 crore shares), Rural Electrification Corporation (1.70 crore shares), Ispat Industries (1.42 crore shares) and Reliance Petroleum (1.29 crore shares) in that order.

Sesa Goa declined 9.87% to Rs 3240 even after the Reserve Bank of India raised foreign institutional investment ceiling in the stock to 45% of its equity.

Alok Industries declined 7.75% to Rs 58 after the company said on Wednesday, 12 March 2008, its unit Alok Infrastructure has taken a 50% stake in Ashford Infotech for joint development of realty projects.

Hindustan Zinc slipped 2.23% to Rs 575 after the company said it has cut zinc prices by 6.5% and lead prices by 7.7%, with immediate effect.

Everonn Systems India declined 10% to Rs 621.65 on reports the company plans to raise $50 million to fund expansion

Emco rose 1.30% to Rs 1085 after the company bagged an order worth Rs 92 crore from Corporate Power, Ranchi, Jharkhand for 400 kilovolt double circuit/double strung transmission line on turnkey basis.

The next trigger for the market would come from the figures of advance tax payment by corporates for the fourth installment, which falls due on 15 March 2008.

Another major trigger for the market is outcome of the US Federal Reserve meeting on 18 March 2008 to review interest rates. A cut in interest rate, as expected by the street may provide some support to the markets. Fed Chairman Ben Bernanke had signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks.

US markets slipped on Wednesday, 12 March 2008, on concerns that the US Federal Reserve will fail to prevent a recession and global crude oil prices surged above $110 a barrel raising fears of further strain on corporate profits.

The Dow Jones industrial average was down 46.57 points, or 0.38%, to 12,110.24. The Standard & Poor's 500 index plunged 11.88 points, or 0.90%, to 1,308.77, and the Nasdaq Composite index declined 11.89 points, or 0.53%, to 2,243.87.

As per data released by the government yesterday, 12 March 2008, growth in index of industrial production (IIP) slipped to 5.3% in January 2008 as compared with 11.6% in January 2007, the lowest since October 2006, when it stood at 4.51%. Growth in the manufacturing sector declined to 5.9% in January 2008 as against 12.3% in January 2007.

Crude oil hovered near Wednesday (12 March 2008)'s record high of $110.20 per barrel.