Sensex loses nearly 1500 pts in 4 days

Indian stocks suffered losses for the fourth straight session today to settle at 10-month low on sustained selling pressure throughout the day. Concerns of further policy tightening by the Reserve Bank of India with inflation reaching 13-year high early this month and political uncertainty, weighed on the market sentiment today. The Capital Goods index, BSE Power index, BSE Realty index, BSE Auto index, BSE Bankex, BSE PSU index touched 52-week lows. The market breadth was weak.

Shares from capital goods, banking, realty, metal and power sector suffered sharp losses. But ONGC gained ahead of its Q4 and year ended March 2008 results scheduled on 25 June 2008.

As per provisional data, foreign funds today, 23 June 2008, sold shares worth a net Rs 665.56 crore. Domestic funds bought shares worth a net Rs 91.75 crore.

RBI governor Y V Reddy today, 23 June 2008, said RBI will play its part in moderating and managing demand and may have to build on actions it has already taken. Reddy said the central bank was in the midst of an intensive examination of issues and options. He added that he does not see any adverse impact of inflation on growth as of now.

In an important political development during the weekend, Uttar Pradesh chief minister Mayawati’s Bahujan Samaj Party (BSP) withdrew its support to the Congress-led UPA government. Given its current strength of 17 members of parliament (MPs) in the Lok Sabha, the BSP's decision to withdraw its support is unlikely to upset the UPA government’s standing.

Meanwhile, the Samajwadi Party, at loggerheads with the BSP, is reportedly in talks with the Congress on extending its support to the Indo-US nuclear deal. The Samajwadi Party has 39 MPs in the Lok Sabha (including two dissidents).

The nuclear energy deal appears headed for an imminent showdown that threatens to trigger early elections, reports suggest. The UPA government may have only a week or so to make up its mind if the pact is to have any chance of final approval before US President George W. Bush leaves office, reports suggest.

The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32. It is the lowest closing level of Sensex in 10 months since late August 2007. Sensex lost 407.84 points at day’s low of 14,163.45 touched in mid-morning trade.

After opening 148.24 points lower at 15,423.05, the Sensex made a recovery attempt striking day’s high of 14,509.26 in early trade itself. At the day’s high Sensex lost 62.03 points.

The broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40. It is the lowest closing level of Nifty in nearly 10 months since late August 2007. Nifty June 2008 futures were at 4275.20 a premium of 8.8 points as compared to spot closing.

Volatility is expected to remain high in the near term as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 16% while that of Nifty was 20%, as on Friday, 20 June 2008.

The Sensex has lost 1403.58 points or 8.94% in four trading sessions, from its close of 15696.90 on 17 June 2008, due to political uncertainty, and on fears of further rise in interest rates by the Reserve Bank of India to combat inflation

The barometer index has now shaved 5,993.67 points or 29.54% in the calendar year 2008 so far from its close of 20286.99 on 31 December 2008. It is down 6,913.45 points or 32.60% from its all time high of 21206.77 struck on 10 January 2008.

Morgan Stanley in a note to clients today lowered the Sensex’s December 2008 fair value to 13,224, from 14,540 set in April 2007. Turmoil in global financial markets, coupled with the slowing of growth and resurgence of inflation, was the reason for the cut in fair value.

All the sectoral indices on BSE except the BSE IT index declined today. The BSE Health Care index (down 2.45% at 4,220.24), BSE Realty index (down 3.64% at 5,187.92), BSE Metal index (down 4.62% to 13,856.33), BSE Oil & Gas index (down 2.63% to 9,172.10), BSE Power (down 4.01% to 2,437.98), BSE Bankex (down 2.56% at 6,630.58), BSE Capital Goods index (down 5.29% at 10,797.01), BSE PSU index (down 2.46% to 6,214.11), underperformed the Sensex.

The BSE IT index (up 0.68% to 4,233.42), BSE FMCG index (down 1.41% to 2,202.65), BSE Auto (down 2.95% at 3,923.41), BSE TecK index (down 0.19% to 3,228.68), and BSE Consumer Durables index (down 1.79% to 3,774.19), outperformed the Sensex.

The market breadth was extremely weak on BSE with 2213 shares declining as compared to 441 that advanced. 47 remained unchanged.

The BSE Mid-Cap index lost 3.60% to 5,815.23 while the BSE Small-Cap index slumped 3.53% to 7,136.30. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 5,015 crore as compared to Rs 5,513.87 crore on Friday, 20 June 2008. Turnover on NSE’s futures & options segment amounted to Rs 66917.33 crore as compared to Rs 58533.66 crore on Friday, 20 June 2008.

Among the 30-member Sensex pack, 22 declined while the rest gained.

India’s largest state-run oil exploration company Oil & Natural Gas Corporation advanced 2.66% to Rs 889.90 on 7.22 lakh shares. It was the top gainer from Sensex pack. The stock moved in a range of Rs 850 and Rs 894 so far during the day. The company will declare its Q4 and year ended March 2008 results on 25 June 2008.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) was down 3.57% to Rs 2021.80 on 16.93 lakh shares. The stock sharply recovered from day’s low of Rs 1984.05. As per reports, RIL plans to open its first North American plant in North Carolina by investing $215 million.

India’s largest dam builder Jaiprakash Associates tumbled 8.88% to Rs 151.80 on 31.470 lakh shares. It was the top loser from Sensex pack.

Ranbaxy Laboratories (down 5.37% to Rs 513.50), Tata Steel (down 3.94% to Rs 747), and Larsen & Toubro (down 7.10% to Rs 2382), were the other major losers from Sensex pack.

India’s second largest private sector bank in terms of net profit HDFC Bank declined 0.48% to Rs 1093.75. The bank announced a hike in its benchmark prime lending rate by 25 basis points to 15.25%. The bank made this announcement after trading hours on Friday, 20 June 2007.

Other frontline banking stocks, State Bank of India (down 2.59% to Rs 1215.20), and ICICI Bank (down 2% to Rs 720), declined.

Shares of PSU banks slumped. Bank of India (down 9.56% to Rs 224.20), Indian Overseas Bank (down 6.69% to Rs 96.25), Andhra Bank (down 6.81% to Rs 60.25), Allahabad Bank (down 6.68% to Rs 61.45), and Union Bank of India (down 6.56% to Rs 116), declined sharply.

Shares from realty estate sector were not spared either. Unitech (down 6.72% at Rs 172.20), Sobha Developers (down 9.39% at Rs 327.05), Parsvnath Developers (down 5.49% at Rs 143.75) and DLF (down 1.39% at Rs 450), slumped.

India’s largest dedicated housing finance company Housing Development Finance Corporation made a sharp recovery from early low of Rs 2140. It settled with gain of 1.31% to Rs 2212.20.

Mahindra & Mahindra (down 4.81% to Rs 547.55), and Maruti Suzuki India (down 5.47% to Rs 688), slipped. However India’s top truck maker in terms of sales, Tata Motors rose 0.24% to Rs 490.

Software stocks were mixed after the rupee fell to near a 14- month low against the dollar. Satyam Computer Services (up 1.26% to Rs 460.80), Infosys (up 1.17% to Rs 1849), Wipro (up 1.59% to Rs 481.70), edged higher. However India’s largest software services exporter TCS lost 0.40% to Rs 860.

Copper makers fell sharply on fears on further squeeze in margin on reports Escondida, the world's largest copper mine, is trying to force Japanese copper metal makers to further reduce treatment and refining charges for new contracts. Sterlite Industries lost 4.33% to Rs 736.50 and Hindalco Industries slumped 7.76% to Rs 148.50. Escondida, located in northern Chile, is majority-owned and operated by Anglo-Australian diversified natural resources firm BHP Billiton.

Reliance Capital was the top traded counter on BSE with turnover of Rs 354.50 crore followed by Reliance Industries (Rs 342.80 crore), Reliance Petroleum (Rs 238.92 crore), Larsen & Toubro (Rs 191.57 crore), and Anu’s Labs (Rs 179.77 crore), in that order.

Reliance Petroleum led the volumes chart clocking volumes of 1.42 crore shares followed by Reliance Natural Resources (1.39 crore shares), IFCI (1.07 crore shares), Chambal Fertilisers (1.05 crore shares) and Ispat Industries (82.77 lakh shares), in that order

Among the momentum counters, Essar Oil (down 7.45% to Rs 209.05), Reliance Capital (down 9.45% to Rs 925), Anu’s Labs (down 6.27% to Rs 382.90), Suzlon Energy (down 5.88% to Rs 228.80), and Reliance Power (down 7.88% to Rs 161.25), declined sharply

EIH plunged 7.49% to Rs 121 after it reported 9.7% rise in net profit to Rs 65.38 crore on 13.1% rise in sales to Rs 339.88 crore in Q4 March 2008 over Q4 March 2007. The company announced the results after trading hours on Friday, 20 June 2008.

Lotte India Corporation surged 5% to Rs 276.05 after its board decided to delist the shares from all the stock exchanges. The company made this announcement before trading hours today, 23 June 2008.

Ansal Properties & Infrastructure slipped 6% to Rs 87.75 despite HDFC Asset Management Company making investment in its subsidiary for participation in the development of hi-tech township in NCR region. The company made this announcement after trading hours on Friday, 20 June 2007.

Madras Cements rose 1.41% to Rs 2790 after the company said its board will meet on 30 June 2008 to consider stock split and issue of bonus shares. The company made this announcement after trading hours on Friday, 20 June 2007.

Pyramid Saimira Theatre rose 5.36% to Rs 228 after the company said its board will meet on 30 June 2008 to consider a proposal for raising additional funds. The company made this announcement before trading hours today, 23 June 2007.

Dredging Corporation of India surged 4% to Rs 558 despite reporting 22.1% decline in net profit to Rs 50.15 crore on 5.6% decline in sales to Rs 190.72 crore in Q4 March 2008 over Q4 March 2007. The company made this announcement after trading hours on 20 June 2008.

Jolly Board was up 5% at Rs 1876.35 after the company said its board will meet on 28 June 2008 to consider stock split and issue of bonus shares. The company made this announcement after trading hours on Friday, 20 June 2007.

European markets, which opened after Indian markets, were in mixed. Key benchmark indices in United Kingdom (up 0.10% to 5,626.20), and Germany (up 0.13% to 6,585.26) rose. However France’s CAC 40 index slipped 0.12% to 4,503.81

Asian markets, which opened before Indian markets, were trading lower today, 23 June 2008. Hang Seng (down 0.01% at 22,744.15), China's Shanghai Composite (down 2.40% at 2,76.72), Nikkei (down 0.63% at 13,853.96), Taiwan's Taiwan Weighted (down 0.44% at 7,867.57), Singapore's Straits Times (down 0.48% at 2,987.34), and South Korea's Seoul Composite (down 0.89% at 1,715.64), were in the red

US stocks tumbled on Friday, 20 June 2008, with the Dow cracking below the crucial 12,000 mark to hit 3-month lows. Moody's cut its ratings for bond insurers M-B-I-A and Ambac. Merrill Lynch reducing its earnings estimates for a host of banks on concerns of credit risk, capital raising and possible dividend cuts also impacted sentiment. The Dow Jones industrial average slumped 220 points to 11,843 while the Nasdaq Composite index declined 56 points to 2406.

Nymex crude oil futures rose $1.06 to $136.42 a barrel today, 23 June 2008, as growing tension between Iran and Israel countered the impact of Saudi Arabia's pledge to pump more oil, and a vow by Nigerian militants to halt attacks.

The wholesale price index rose 11.05% in the 12 months to 7 June 2008, government data released on Friday, 20 June 2008, showed. The rate was above market expectation of about 10% rise. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.