Sensex, Nifty at 10-month low

It was the worst day for Indian equity markets since the beginning of this year. Investors chucked stocks to survive the snowballing threat of a possible monetary tightening by Reserve Bank of India to rein in soaring inflation.

The key benchmark indices plummeted over 3% to end at their lowest level in 10 months after the latest data showed a surge in inflation to 13-year high early this month. The market breadth was extremely weak due to widespread selling. All the sectoral indices on BSE ended in the red. Oil & gas and realty stocks declined sharply.

As per provisional data, foreign funds today, 20 June 2008, sold shares worth a net Rs 999.31 crore. Domestic funds bought shares worth a net Rs 563.86 crore.

The 30-share BSE Sensex slumped 516.70 points or 3.42% at 14,571.29, its lowest closing since late August 2007. The index shed 568.72 points at the day’s low of 14,519.27 hit at the fag end of the trading session today. The Sensex gained 114.02 points at the day’s high of 15,202.01, hit at the onset of trading session.

The broader based S&P CNX Nifty was down 157.70 points or 3.48% at 4347.55, its lowest closing level since August 2007. Nifty June 2008 futures were at 4343, a discount of 4.55 points compared with the spot closing. NSE's futures & options (F&O) segment turnover was Rs 58533.66 crore, which was higher than Rs 42696.18 crore on Thursday, 19 June 2008.

The Sensex is down 6635.48 points or 31.28% from a record high of 21206.77 it hit on 10 January 2008. It is down 5715.70 points or 28.17% in calendar year 2008 so far.

The market breadth was poor on BSE with 450 shares advancing as compared to 2247 that declined. 43 remained unchanged.

The BSE Mid-Cap index outperformed the Sensex, falling 3.17% to 6,032.43. The BSE Small-Cap index underperformed the Sensex, sliding 3.43% at 7,397.66.

India’s second largest cellular service provider by sales Reliance Communication (RCom) slipped 6.65% at Rs 491.30. South African mobile giant MTN remained silent on its talks with the company at its annual general meeting (AGM) in Johannesburg on Thursday, 19 June 2008. The AGM was expected to discuss RCom merger deal especially in the back drop of the Reliance Industries’ claims over first right of refusal for a controlling stake in RCom.

India's largest aluminium producer by sales Hindalco Industries slipped 6.37% at Rs 161 after its board approved raising up to Rs 5000 crore by way of a rights issue to redeem a bridge loan it had taken for acquisition of Novelis Inc.

The other major losers from the Sensex pack were, Jaiprakash Associates (down 6.03% at Rs 166.60), Reliance Infrastructure (down 4.92% at Rs 962.55), Bharti Airtel (down 4.76% at Rs 766.40) and Tata Steel (down 4.66% at Rs 777.60).

India's top state-run oil explorer by market capitalisation ONGC rose 1.56% at Rs 866.85. It was the only gainers from the Sensex pack.

The BSE Oil & gas index underperformed the Sensex, sliding 5.03% to 9,419.89. Reliance Natural Resources (down 7.27% at Rs 82.95), Essar Oil (down 6.62% at Rs 225.80), and Cairn India (down 5.69% at Rs 267.60), slumped.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 6.61% at Rs 2096.60. RIL has a highest weightage of 15.80% in Sensex.

Stocks of the interest rate sensitive sectors such as automobiles, realty and banking dropped after the inflation data. Bank of India (down 7.36% at Rs 247.90), State Bank of India (down 4.11% at Rs 1,247.50), and HDFC Bank (down 1.93% at Rs 1,099), were the key losers from the banking space. The BSE Bankex outperformed the Sensex, falling 2.97% to 6,804.78.

India's largest private sector bank by assets ICICI Bank lost 2.48% at Rs 734.65. ICICI Bank has a third highest weightage of 8.11% in BSE Sensex.

The BSE Realty index underperformed the Sensex, falling 4.45% at 5,383.81. Housing Development & Infrastructure (down 9.17% at Rs 528.15), Sobha Developers (down 6.66% at Rs 360.95), Indiabulls Real Estate (down 5.91% at Rs 354.05), Unitech (down 2.12% at Rs 184.60) and DLF (down 4.57% at Rs 456.35), tumbled.

Realty developer Parsvnath Developers lost 6.28% to Rs 152.10 after the company reported 17% fall in net profit to Rs 108.87 crore in Q4 March 2008 over Q4 March 2007.

Automobile sector stocks lost steam fearing that a tight monetary policy may compel banks to raise lending rates which in turn would hurt demand for automobiles. TVs Motor Company (down 5.19% at Rs 32.85), Hero Honda Motors (down 4.01% at Rs 759), Tata Motors (down 2.82% at Rs 488.85), Maruti Suzuki (down 2.51% at Rs 727.80) and Mahindra & Mahindra (down 0.22% at Rs 575.20), declined.

India’s second largest software exporter by sales Infosys Technologies shed 1.74% at Rs 1827.60. Infosys has a second highest weightage of 8.76% in BSE Sensex.

Sundaram Clayton, which resumed trading today on BSE, fell 57.92% at Rs 282.55. It opened at Rs 324 and touched a high of Rs 397.80 in early trade.

Reliance Industries clocked the highest turnover of Rs 387.31 crore on BSE. Anu's Laboratories (Rs 263.72 crore), Niraj Cement Structurals (Rs 233.67 crore), Reliance Capital (Rs 233.25 crore) and Reliance Petroleum (Rs 201.16 crore), were the other turnover toppers on BSE in that order.

Reliance Natural Resources reported a highest volume of 1.32 crore shares on BSE. IFCI (1.27 crore shares), Niraj Cement Structurals (1.16 crore shares), Reliance Petroleum (1.15 crore shares) and Chambal Fertilizers & Chemicals (1.07 crore shares), were the other volume toppers on BSE in that order.

European markets were trading lower. Key indices in UK, Germany and France were down by 1.07% to 1.43%. Some of the indices were trading in positive terrain earlier.

Asian stocks were mixed today. The key benchmark indices in Hong Kong, China and Singapore were up by between 0.31% to 3.01%. Key benchmark indices in Japan, Taiwan and South Korea were down by between 0.23% to 1.81%.

US stocks rose Thursday, 19 June 2008, as a drop in oil prices fueled investor optimism about consumer spending, driving shares of transportation and retailers sharply higher. The Dow Jones Industrial Average gained 34.03 points or 0.28% to 12,063.09. The tech-laden Nasdaq Composite Index rose 32.35 points or 1.33% to 2,462.06.

US crude for July delivery settled down $4.75, or 3.48%, at $131.93 per barrel on the New York Mercantile Exchange on Thursday. It lost further to $131.71 today as China's surprise move to increase fuel prices sparked worries about a curb in demand from the world's second largest consumer.

The sharp fall in oil price came just days before an emergency meeting on Sunday, 22 June 2008, in Saudi Arabia between oil consumers and producers to discuss rising oil prices. Saudi Arabia, the world's top oil exporter, is hiking output to help bring down prices, which have jumped nearly 40% this year and caused protests around the globe.