Weekly Market Wrap - March 14 2008

Sensex, India`s benchmark index, continued to decline for the week ended Mar. 14, 2008, by tracking falls in global markets and unexpected drop in IIP (Index of Industrial Production) numbers. Global markets were unable to withhold the gains arrived after the Federal Reserve` efforts to promote liquidity in the financing markets by injecting USD 200 billion on concerns about the widening credit losses in US and worries that record oil prices will curb global growth.

Investors are also worried about industrial growth which was showing signs that the Indian economy is slowing, as it declined sharply at 5.3% for January 2008, as compared to 11.6% in the same month last year. Overseas investors and Indian mutual funds were also net sellers in the week. Analysts are expecting bearish performance in the markets over short term. Some recovery is expected after the Federal Reserve meeting on March 18. The Federal Reserve is likely to cut interest rate further in the meeting.

All sectoral stocks declined in the week except oil & gas shares. Broad based fall in the market was led by IT, consumer durable, technology, metal and consumer durable. Mid-cap and small-cap shares were not exception to this fall.

The 30 share index, Sensex lost further 215 points, or 1.34%, to 15,760.52 in the week ended March 14, whereas the broad based NSE Nifty declined 25.80 points, or 0.54%, to 4,745.80 in the same period. However, the BSE mid-caps and the small-caps lost 3.25% and 3.92% respectively over the week.

The only gainer in the sectoral indices was Oil & Gas which settled 3.31% higher over the week on higher record oil prices.

Major losers in the sectoral indices were BSE IT, which dropped 6.37%, Consumer Durables fell 5.51%, TECK lost 4.39%, Consumer Goods declined 3.17%, Auto went down 2.06% and Bankex fell 1.82%. Health Care, FMCG, Realty and Power indices posted less than 1% losses.

Overseas investors were net sellers in equities worth Rs 13.39 billion in the period of March 10 to 13. As per the provisional figures, they sold net of Rs 3.58 billion worth equities on March 14. Including the provisional figures, they were net sellers in equities worth Rs 16.97 billion during the period March 10 to 14. On the other hand, mutual funds were net seller in equities to the tune of Rs 2.21 billion during the period March 10 to 13.

Major Corporate Developments
Shares of Rural Electrification Corporation got listed at a premium of 19.05%, or at Rs 125, as against its issue price of Rs 105 a share at the Bombay Stock exchange (BSE) March 12.

Shares of Kerala-based V-Guard Industries got listed at a premium of 9.76%, or at Rs 90, as against its issue price of Rs 82 a share at the National Stock exchange (NSE) on March 13.

Larsen & Toubro, a USD 5 billion technology, engineering and construction company with global operations, announced it is likely to post Rs 2 billion in losses related to commodities derivatives in current financial year. However, the company mentioned that it will maintain the guidance on order booking, sales and operating margins for the year with an emphasis on improvement in the operating margins.

Inflation
India`s inflation stood at 5.11% for the week ended Mar. 01, 2008 as against 5.02% for the previous week on increased in prices of primary articles and aviation turbine fuel. The annual rate of inflation stood at 6.51% as on Mar. 3, 2007.