Political worries pull market down

Bears struck back with a vengeance on the bourses today after a sharp rally in the past two days. Bears used the ploy of weak European markets and deferral of a crucial UPA-Left coordination committee meeting on Indo-US nuclear deal scheduled today, to bring share prices down. The decline followed a range bound movement on the bourses for a better part of the day till early afternoon trade. News of deferral of the UPA-Left meet on nuclear deal hit the market in afternoon trade.

Banking and IT stocks bore the major brunt of selling. FMCG stocks rose on defensive buying.

Media reports had suggested that the government would try to persuade the communists in today's meeting to at least allow it to conclude negotiations with the International Atomic Energy Agency (IAEA), a crucial step in putting the deal into effect. The nuclear deal, if finalised, will meet some of India's energy needs.

The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31. The index shed 306.68 points at the day’s low of 15,390.22 hit at the fag end of the trading session. At the day’s high of 15,789.62, Sensex gained 92.72 points in early trade.

The broader based S&P CNX Nifty was down 70.6 points or 1.52% at 4582.40. Nifty June 2008 futures were at 4561.40, a discount of 21 points compared with the spot closing.

As per provisional data, foreign funds today sold shares worth a net Rs 435 crore. Domestic funds bought shares worth a net Rs 193.64 crore.

Reports of good monsoon in the first half this month, higher advance tax paid by key Indian corporates, and cooling off of oil prices from record high had boosted the battered bourses in the past two day. Sensex had risen 507.28 points or 3.33% to 15696.90 on Tuesday, 17 June 2008 from its close of 15189.62 on 13 June 2008.

The barometer index is down 5784.46 points or 27.27% 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.

Coming back to today's trade, the market breadth, which was strong in early trade, turned weak later as mid-and small-cap stocks lost ground later in the day. On BSE with 1254 shares advanced as compared to 1402 that declined. 75 remained unchanged. The breadth.

The BSE Mid-Cap index down 0.63% to 6,359.79 and BSE Small-Cap index was down 0.08% to 7,775.29.

BSE clocked a turnover of Rs 6160 crore as against Rs 5,337.45 crore on Tuesday, 17 June 2008. NSE's futures & options (F&O) segment turnover was Rs 47440.71 crore, which was higher than Rs 42624.38 crore on Tuesday, 17 June 2008.

India’s biggest drugmaker by sales Ranbaxy Laboratories advanced 2.88% to Rs 598.20 on reports Japanese drug-maker Daiichi-Sankyo may revise the open offer price for minority shareholders if US drug major Pfizer launches a counter offer. The stock rose on heavy volume of 40.8 lakh shares on BSE.

In a major development announced after trading hours today, 18 June 2008, Ranbaxy Laboratories said it has reached a comprehensive settlement over disputes with Pfizer, clearing the way to launch generic version of the US firm's cholesterol drug Lipitor. The settlement covers the United States, Europe, Canada and Australia.

Banking stocks witnessed massive selling pressure after rise in past two sessions. India's largest private sector bank by assets ICICI Bank fell 4.25% at Rs 785.35. ICICI Bank has a third highest weightage of 8.18% in BSE Sensex.

Axis Bank (down 5.16% at Rs 753.25), HDFC Bank (down 4.23% at Rs 650.25), and State Bank of India (down 2.61% at Rs 1,350.90), slipped. The BSE Bankex underperformed the Sensex, falling 3.45% to 7,306.44.

The BSE IT index underperformed the Sensex, sliding 2.39% to 4,333.94. HCL Technologies (down 4.41% at Rs 279.40), Satyam Computer (down 2.44% at Rs 472.50), TCS (down 2.27% at Rs 900.50), Wipro (down 1.94% at Rs 484.85), declined.

India’s second largest software exporter by sales Infosys Technologies fell 2.49% at Rs 1,865.70. Infosys has a second highest weightage of 8.80% in BSE Sensex.

Cement stocks were in demand. Ambuja Cements (up 4.80% at Rs 90.65), ACC (up 0.88% at Rs 643.20), and Grasim Industries (up 2.38% at Rs 2229.10), rose. Some cement makers have reportedly paid higher advance taxes in the June 2008 quarter, hinting at the possibility of brisk business in the current fiscal.

Realty stocks tumbled. The BSE Realty index underperformed the Sensex, falling 3.50% to 5,885.78. Indiabulls Real Estate (down 6.07% at Rs 397.90), Sobha Developers (down 3.36% at Rs 395.45), Unitech (down 3.31% at Rs 200.25), and DLF (down 2.68% at Rs 492.35), slumped.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.96% at Rs 2283.50. RIL has a highest weightage of 15.76% in BSE Sensex.

India’s second largest cellular services provider Reliance Communication rose 0.42% to Rs 527.95. As per reports, Anil Ambani is considering buying more than 40% in South Africa-based MTN. The stock had lost 2.42% to Rs 530.20 on Tuesday, 17 June 2008 from Rs 543.35 on Friday, 13 June 2008, after RIL on Friday, 13 June 2008, claimed first right of refusal to buy a controlling stake in Reliance Communication (RCom).

RCom, controlled by Anil Ambani, is in exclusive talks with South Africa's MTN for a tie-up that could create a top-10 global telecoms firm.

Drug maker Plethico Pharmaceuticals rose 2.75% to Rs 384.80 on reports the company plans to acquire a US-based nutraceutical company for about $80 million to $100 million.

Auto lubricants maker Tide Water Oil was locked at upper limit of 5% at Rs 4040.40 on reports Reliance Industries, French oil giant Total, US oil giant Chevron, Hinduja group and Keventer group have evinced interest in bidding for Andrew Yule's stake in the firm.

IT soulutions provider Cambridge Solutions was locked at upper limit of 20% at Rs 57.80 on reporting net profit of Rs 17.18 crore in Q4 March 2008 as compared to net loss of Rs 1.65 crore in Q3 December 2007.

Anu's Laboratories clocked the highest turnover of Rs 643.25 crore on BSE. Reliance Capital (Rs 286.03 crore), Ranbaxy Laboratories (Rs 245.66 crore), Reliance Industries (Rs 211.08 crore), and Reliance Petroleum (Rs 163.08 crore), were the other turnover toppers on BSE in that order.

Anu's Laboratories reported a highest volume of 1.49 crore shares on BSE. Ispat Industries (1.39 crore shares), Chambal Fertilizers and Chemical (1.30 crore shares), Reliance Natural Resources (1.27 crore shares) and IFCI (1.14 crore shares), were the other volume toppers on BSE in that order.

European markets, which opened after Indian market, were trading lower. Key indices in UK, France and Germany were down by 0.25% to 1.17%.

Asian markets, which opened before Indian market, were trading higher. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.19% to 5.24%.

US market closed lower yesterday, 17 June 2008, following a warning from Goldman Sachs that banks may need to raise another $ 65 billion to tide over the credit crisis. The news rippled through the market, offsetting any positive impact from Goldman's earnings. The Dow Jones industrial average plunged 108.78 pints, or 0.89%, to 12,160.30. The S&P 500 index declined 9.21 points, or 0.68%, to 1,350.93, while the Nasdaq composite index lost 17.05 points, or 0.69%, to 2,457.

US crude oil futures fell further on Wednesday, 18 June 2008, after settling lower for a third day in a row on Tuesday, 17 June 2008, on expectations Saudi Arabia will soon boost output. Front-month US crude for July delivery was down 65 cents, or 0.49%, at $133.36 a barrel on the Globex electronic trading platform.