Market extends losses on weak Asian equities

The market succumbed to selling pressure for the second consecutive day today. Political concerns and weak Asian markets weighed on the investor sentiments. Banking, realty and capital goods stocks were hurt the most in today’s trade. All the sectoral indices on BSE ended in red.

As per provisional data, foreign funds today, 19 June 2008, sold shares worth a net Rs 598.36 crore. Domestic funds bought shares worth a net Rs 141.07 crore.

Asian markets, which opened before Indian markets, ended on a weak note. Key indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 1.88% to 6.54%. The Dow Jones Industrial Average hit its lowest level in three months on Wednesday, 18 June 2008, as worries about a weak US economy compounded by credit sector concerns dragged down shares in banks, autos and transport firms

However, European markets, which had opened on a weak note, recovered during the course of the trading session after unexpected news of a British shopping spree last month offset early gloom about the banking sector. Key indices in UK and France were up 0.21% to 0.51%. However, Germany’s DAX index was down 0.11%.

Political worries continued to weight on the market sentiment for a second day in a row. The postponement of a key meeting between the government and its communist allies on the proposed nuclear deal between US and India keeps the future of the deal uncertain. Talks were set to take place Wednesday, 18 June 2008, in New Delhi, but Communist leaders say the meeting will now take place on 25 June 2008. The delay comes as Left wing parties’ reffirm their opposition to the agreement, saying it undermines India's independent foreign policy and nuclear weapons program. As per reports, CPM, a key left party, may be working on a plan to pull out support to the Congress-led UPA government at the Centre.

The 30-share BSE Sensex lost 334.32 points or 2.17% at 15,087.99. The index shed 370.65 points at the day’s low of 15,051.66 hit in the mid-afternoon trade.

The broader based S&P CNX Nifty was down 78.15 points or 1.71% at 4504.25. Nifty June 2008 futures were at 4486, a discount of 18.25 points compared with the spot closing.

The market had dropped yesterday, 18 June 2008, led by weak European markets and following deferral of the UPA-Left coordination committee meeting on Indo-US nuclear deal. The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31 on that day.

The Sensex is down 6118.78 points or 28.85% from a record high of 21206.77 it hit on 10 January 2008. Slowdown in corporate earnings caused by moderation in economic growth and increase in risk aversion globally due to credit crisis in the United States, has triggered a massive fall on the Indian bourses this year.

Back to today's trade, the market breadth was weak on BSE with 842 shares advancing as compared to 1804 that declined. 71 remained unchanged.

The BSE Mid-Cap index fell 2.04% to 6,230.17 and BSE Small-Cap index shed 1.48% to 7,660.42. Both the indices outperformed the Sensex.

BSE clocked a turnover of Rs 4297 crore as against Rs 6,183.16 crore on Wednesday, 18 June 2008. NSE's futures & options (F&O) segment turnover was Rs 42696.18 crore, which was lower than Rs 47440.71 crore on Wednesday, 18 June 2008.

Banking shares witnessed selling pressure. Axis Bank (down 4.67% at Rs 718.10), HDFC Bank (down 3.93% at Rs 1120.60), and State Bank of India (down 3.69% at Rs 1301), slipped. The Bankex underperformed the Sensex, falling 4.01% to 7,013.18.

India's largest private sector bank by assets ICICI Bank fell 4.08% at Rs 753.30. ICICI Bank has a third highest weightage of 8.27% in BSE Sensex.

Sell-off was also witnessed in the capital goods stocks. Punj Lloyd (down 5.34% at Rs 252.85), Bharat Heavy Electricals (down 5.04% at Rs 1,423.15), and Larsen & Toubro (down 4.84% at Rs 2,617.30), tumbled. The BSE Capital Goods index underperformed the Sensex, sliding 3.73% to 11,667.69.

Realty stocks, which are known to have high beta value, were the worst hit. Anant Raj Industries (down 7.67% at Rs 154.10), Unitech (down 5.82% at Rs 188.60), Indiabulls Real Estate (down 5.43% at Rs 376.30) and DLF (down 2.87% at Rs 478.20), slumped. The BSE Realty index underperformed the Sensex, falling 4.27% to 5,634.60.

India's second largest power utility by revenue Reliance Infrastructure lost 5.68% to Rs 1012.35 following reports the company is planning to invest $7 billion in the next three years to expand its engineering and construction business in India and acquire assets overseas.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 1.69% at Rs 2245. RIL has a highest weightage of 15.72% in BSE Sensex.

India’s second largest software exporter by sales Infosys Technologies fell 0.31% at Rs 1860. Infosys has a second highest weightage of 8.59% in BSE Sensex.

India's largest drug maker by sales Ranbaxy Laboratories declined 7.68% at Rs 552.25 after the company agreed to keep generic versions of the Pfizer's cholesterol pill Lipitor off the US market for extra 20 months. As per the agreement, Ranbaxy will not sell a generic of Lipitor, the world's best-selling drug, until November 2011.

Debutant Niraj Cement Structurals settled at Rs 190.15 on BSE, a minuscule premium of 0.08% over the IPO price of Rs 190. Earlier today, the stock debuted at Rs 185, a discount of 2.63% over issue price.

State-run Mahanagar Telephone Nigam gained 1.62% to Rs 97 after the company said it has received license from the Department of Telecom for providing international long distance services.

Polymer products maker Time Technoplast surged 1.24% to Rs 780.80 after the company said its board will meet on 27 June 2008 to consider stock split. The stock earlier touched a high of Rs 845.

Automobile battery maker Exide Industries advanced 3.09% to Rs 73.35 after the company acquired a 51% stake in Leadage Alloys India, an unlisted Bangalore-based lead smelting company, for Rs 34 crore.

Engineering firm Roman Tarmat gained 3.01% to Rs 73.55 after the company said it has received two orders worth Rs 106.48 crore from Tamil Nadu Road Infrastructure Development Corporation for laying roads in Kancheepuram district at Tamil Nadu.

BOC India surged 19.82% to Rs 196.45 on reports BOC Group plc UK, a part of the Linde Group, has increased open offer price for minority shareholders to Rs 200 per share from the earlier Rs 165 per share.

Anu's Laboratories clocked a highest turnover of 375.97 crore on BSE. Niraj Cement Structurals (Rs 337.92 crore), Ranbaxy Laboratories (Rs 302.82 crore), Reliance Capital (Rs 189.39 crore) and Reliance Petroleum (Rs 129.34), were the other turnover toppers on BSE in that order.

Debutant Niraj Cement Structurals reported a highest volume of 1.77 crore shares on BSE. Chambal Fertilizers & Chemicals (1.03 crore shares), Anu's Laboratories (85.42 lakh shares), IFCI (81.97 lakh shares), and Reliance Petroleum (71.76 lakh shares), were the other volume toppers on BSE in that order.

Oil fell on Thursday, 19 June 2008, as supply concerns in Nigeria eased after the country's oil ministry prevented a potentially crippling strike by workers at Chevron. But falling US oil stocks and comments from the White House that Saudi Arabia was unlikely to raise output in the near term supported prices, which have climbed 40% this year. US crude fell 73 cents to $135.95 a barrel, after settling up $2.67 at $136.68 a day ago on the Nigerian worries.

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