Sensex up nearly 20% in financial year ended March 2008

Sustained selling pressure in blue chips ever since the opening bell spooked the bourses today. Negative cues from global markets dampened sentiment. The sentiment was also hit by reports that the Institute of Chartered Accountants of India (ICAI) has asked companies to disclose losses on a mark-to-market basis incurred due to derivatives trades from the current financial year onwards (year ending March 2008), as a precursor to making a new accounting standard -- the AS-30 -- mandatory from 1 April 2011. This may hit Q4 March 2008 and FY 2008 (year ending March 2008) bottom line of Indian firms.

European markets, which opened after Indian markets, were weak in early trade. Asian markets, which opened before Indian market, were in red. US stocks dropped on Friday, 28 March 2008, as a profit warning from US department store chain J.C. Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks. A prominent analyst warned that earnings will not support current dividend payouts in 2008 at Citigroup, Wachovia Corp and other US banks.

The BSE Sensex dipped below 16,000 mark. 28 stocks from the 30-member Sensex pack declined. Despite the sharp fall, the market breadth was positive.

The 30-share BSE Sensex plunged 726.85 points or 4.44% at 15,644.44. Sensex had opened with a downward gap of 144.63 points at 16,226.66 and slipped 808.14 points to touch day’s low of 15,563.15 in late trade.

As per provisional data, foreign funds sold shares worth a net Rs 865.79 crore today. Domestic funds bought shares worth a net Rs 566.03 crore.

The BSE Sensex lost 4642.55 points or 22.88% in the quarter ended March 2008. The Sensex gained 2572.34 points or 19.67% in the financial year 2008, from its close of 13072.10 on 30 March 2007.

The broader based S&P CNX Nifty plunged 207.50 points or 4.20% at 4,734.50. Nifty lost 1404.10 points or 22.87% from 6,138.60 on 31 December 2007 in the quarter ended March 2008. Nifty rose 912.95 points or 23.88% in the financial year 2008, from its close of 3821.55 on 30 March 2007.

Nifty April 2008 futures were at 4715, a discount of 19.50 points as compared to spot closing.

The ICAI norm requires companies to provide for all losses, including those that may occur due to trading in derivatives. Indian companies are sitting on huge losses on account of the forex derivative transactions they undertook during the year. A steep decline in the value of the US dollar against the Japanese Yen and the Swiss Franc has hit Indian corporates which have used these two currencies (Yen and Franc) extensively to swap their rupee denominated debt.

There are many companies, which are not disclosing these losses, as it is not mandatory to show these numbers in the balance sheets. But with the new accounting norms they now have some compulsions. Companies, which thought that they could escape declaring the losses, will now have to come forward and show their numbers, which could hit their balance sheet, which, in turn, may impact their market capitalisation.

Earlier, robust corporate advance tax payments in Q4 March 2008 indicated that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms were doing better than sectors like automobiles and cement.

Despite the market crash, the market breadth was positive: On BSE 1,356 shares advanced as compared to 1,302 that declined. 45 shares remained unchanged.

The BSE Mid-Cap index was down 1.46% to 6,427.82 while the BSE Small-Cap index slipped 0.76% to 7,841.62. Both these indices outperformed the Sensex

The total turnover amounted to Rs 5912 crore on BSE as compared to Rs 6,463.99 crore on Friday, 28 March 2008.

Total turnover in NSE’s futures & options segment amounted to Rs 47200.87 crore as compared to Rs 49087.03 crore on Friday, 28 March 2008.

All sectoral indices on BSE posted losses. The BSE IT index (down 5.60% to 3,547.61), the BSE Bankex (down 5.89% at 7,717.61), the BSE Realty index (down 5.39% at 7,554.80), underperformed the Sensex

The BSE Auto (down 4.31% at 10,016.82), the BSE Consumer Durables index (down 3.52% to 3,883.29), the BSE FMCG index (down 1.23% at 2,290.07), the BSE Health Care index (down 0.18% at 3,848.11), the BSE TecK index (down 3.93% to 3,024.13), the BSE Power (down 3.40% to 3,189.81), the BSE Capital Goods index (down 3.09% at 14,009.02), the BSE Metal index (down 4.31% to 14,022.56), the BSE Oil & Gas index (down 4.31% to 10,016.82), and the BSE PSU index (down 3.67% to 7,426.83), outperformed the Sensex

India’s largest dedicated housing finance provider in terms of net profit Housing Development Finance Corporation slumped 9.10% to Rs 2376.20 on 2.74 lakh shares. It was the top loser from Sensex pack.

Banking shares slumped. HDFC Bank (down 6.87% to Rs 1304.85), ICICI Bank (down 8.03% to Rs 768.10), and State Bank of India (down 4.26% to Rs 1608.15), also slipped.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries lost 4.11% to Rs 2251 on 11.24 lakh shares. The stock moved in a range of Rs 2251 and Rs 2340 during the day.

IT pivotals were hit on worries a recession in US may impact their revenues. Infosys Technologies (down 6.31% to Rs 1429), Satyam Computers (down 3.42% to Rs 394.50), Wipro (down 8.59% to Rs 415), and TCS (down 7.94% to Rs 801), declined. IT firms derive majority of their revenue from exports to US markers.

Reliance Energy, the country’s largest private sector power utility company in terms of net profit slipped 6.12% to Rs 1252. The company has bought back 6.50 lakh equity shares since the start of the offer on Tuesday, 25 March 2008 aggregating Rs 83.15 crore

Hindalco Industries (down 6.13% to Rs 164.70), DLF (down 7.14% to Rs 646) and ONGC (down 6.61% to Rs 982), edged lower from the Sensex pack.

Cipla, the country’s third largest pharma company in terms of sales, gained 0.96% to Rs 219.60 on 4.83 lakh shares. It was the lone gainer from Sensex pack.

Reliance Capital was the top traded counter on BSE with turnover of Rs 323.48 crore followed by GSS America Systems (Rs 288.50 crore), Reliance Industries (Rs 257.43 crore), Orchid Chemicals & Pharmaceuticals (Rs 187.09 crore), and Reliance Petroleum (Rs 162.10 crore), in that order.

Ispat Industries led the volume charts clocking volumes of 2.34 crore shares followed by Reliance Natural Resources (1.33 crore shares), Orchid Chemicals & Pharmaceuticals (1.18 crore shares), IFCI (1.14 crore shares) and Reliance Petroleum (1.02 crore shares), in that order

Among the side counters, Axon Infotech (up 19.11% to Rs 41.45), Aro Granite (up 19.51% to Rs 102), Indowind Energy (up 20% to Rs 68.20), and Sulzer India (up 20% to Rs 687), surged

Action Construction Equipment (down 13.45% to Rs 75.75), ECE Industries (down 11.95% to Rs 330), India Infoline (down 11.30% to Rs 760), and Indiabulls Financial Services (down 13.12% to Rs 410), slipped.

Tyre stocks rose on reports that tyre manufacturers are gearing up to increase prices following a surge in input costs. CEAT (up 6.10% to Rs 108), Govind Rubber (up 3.91% to Rs 14.60), Premier Tyre (up 2.63% to Rs 29.25) edged higher.

Era Infra Engineering was down 0.25% to Rs 594.90 after the company secured a contract worth Rs 20 crore for supply of ready mix concrete in New Delhi.

Cairn India slipped 3.02% to Rs 223.15. The company posted net higher loss of Rs 78.82 crore in the year ended December 2007 as compared to net loss of Rs 29.22 crore in the year ended December 2006. Cairn India's total income rose 474.60% to Rs 33.96 crore in the year ended 31 December 2007 over the year ended 31 December 2006. The company announced the results before trading hours today, 31 March 2008.

Bhushan Steel slipped 8.76% to Rs 659 after the company said it is planning to set up a value added steel plant in Chennai with a production capacity of 0.5 million tonne per annum and total investment of about Rs 500 crore. The company made this announcement during trading hours today, 31 March 2008.

Suven Life Sciences declined 4.24% to Rs 31.65 after the company said it has secured patent rights in Mexico and Korea for two of its new chemical entities for the treatment of disorders associated with neurodegenerative diseases.

City Union Bank declined 2.76% to Rs 28.20 after bank said it would issue 80 million shares by way of qualified institutional placement. The bank made this announcement after market hours on Friday, 28 March 2008.

Spanco Telesystems & Solutions fell 2.14% to Rs 160.25. The stock surged to a high of Rs 180 after the company said on Monday, 31 March 2008, it won orders worth Rs 166 crore from various parties.

Amtek Auto declined 0.92% to Rs 258 after company said it may suffer losses up to $18 million in the next two years due to volatility in the global currency market. The company made this announcement after market hours on Friday, 28 March 2008.

Diamond Cables rose 1.13% to Rs 340 after the company received an engineering procurement and construction order for implementation of Rajiv Gandhi Gramin Vidyutikaran Yojna in Gujarat.

The key benchmark indices in United Kingdom (down 0.55% to 5,661.80), France (down 0.50% to 4,4672.40), and Germany (down 1.46% to 6,464.63), edged lower.

Asian markets settled lower today, 31 March 2008. Hang Seng (down 1.88% at 22,849.20), Japan's Nikkei (down 2.30% at 12,525.54), Taiwan's Taiwan Weighted (down 0.59% at 8,572.59), Singapore's Straits Times (down 0.81% at 3,007.26), Shanghai Composite (down 3% to 3,472.13), edged lower. However South Korea's Seoul Composite rose 0.13% to 1,703.99

US markets closed lower on Friday, 28 March 2008 after a profit warning from J.C. Penney renewed fears about slower consumer spending. The Dow Jones industrial average slipped 86.06 points, or 0.70%, to 12,216.40. The S&P 500 index was down 10.54 points, or 0.80%, to 1,315.22, and the Nasdaq Composite index declined 19.65 points, or 0.86%, to 2,261.18.