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Saturday, June 14, 2008

Market plunges for the fourth week in a row


India`s benchmark index, Sensex extended its losses to the fourth straight week. HDFC Bank led lenders lower, on speculation that the central bank will add to this week`s interest rate increase after inflation accelerated to a seven-year high. The decline was also due to heavy selling by overseas investors, weak global markets and soaring inflation concern.

The 30-share index lost 382.56 points, or 2.45% to 15,189.62 in the week ended Jun. 13, 2008 whereas the broad based NSE Nifty closed down 110.7 points, or 2.39% to 4,517.10 in the same period.

BSE mid-caps and small-caps declined 1.92% and 1.48% respectively in the week.

Asian stocks posted their biggest weekly fall in three months, led by financial companies after crude oil rose to a record, raising concern faster inflation and higher interest rates will slow economic growth.

The wholesale price index, inflation, soared to 8.75% for the week ended May 31, as compared with 8.24% in the previous week, fueled by high prices of all essential commodities.

Overseas investors sold net of Rs 35.95 billion of equities in the week including provision.

Gainers of the week included Ranbaxy, BHEL, Tata Steel, Cipla and Bharti Airtel. On the other hand losers were Jaiprakash Associates, ONGC, HDFC Bank, HDFC and DLF.

Ranbaxy Laboratories, India`s biggest drugmaker surged over 11% during the week. It rose to the highest in more than three years on report that Pfizer Inc. may make a hostile bid that would trump an agreed takeover by Daiichi Sankyo.

HDFC Bank, the nation`s third-largest lender, dropped to its lowest in more than nine months.

DLF, India`s largest estate developer, extended a four-week plunge to 26% on concern higher mortgage costs will pare demand for homes.

Engineering major Bharat Heavy Electricals (BHEL) moved up 9.82% over the week. The firm bagged a turnkey contract from HMEL, a joint venture of HPCL and L.N. Mittals`, Mittal Energy, for setting up an energy efficient and environment friendly 153 MW captive power plant at the upcoming Guru Gobind Singh Refinery at Bhatinda in Punjab, valued at Rs 11.50 billion.

The company further bagged boiler-turbine-generator (BTG) contracts worth Rs 35 billion from NTPC and its JV subsidiary, Nabinagar power plant, for a total of 1,750 MW units.

via IRIS