Sensex sheds 769 points

The key benchmark indices slumped as a political rift over nuclear deal, soaring crude oil prices and high inflation weighed heavily on the market sentiment. The BSE Sensex fell to the lowest level in 13-months while the S&P CNX Nifty touched a 10-month low.

Sensex declined 769.07 points or 5.28% to 13,802.22 in the week ended Friday, 27 June 2008. The S&P CNX Nifty lost 210.90 points or 4.85% to 4136.65 in the week.

The BSE Mid-Cap index declined 473.68 points or 7.85% to 5,558.75. The BSE Small-Cap index slumped 459.59 points or 6.21% to 6,938.07.

The market suffered major losses on 23 June 2008 to settle at 10-month low on sustained selling pressure throughout the day. The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32. The broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40.

Equities extended losses for the fifth straight day on 24 June 2008 with the barometer index BSE Sensex falling below the psychologically important 14,000 mark for the first time in 10 months since late August 2007. The 30-share BSE Sensex was down 186.74 points or 1.31% at 14,106.58. The broader based S&P CNX Nifty slumped 75.30 points or 1.76% at 4,191.10.

On 25 June 2008, equities staged a solid rebound after touching fresh calendar 2008 lows in early trade. The initial jolt was caused by the Reserve Bank of India's move to hike the key lending rate. However, short covering ahead of the expiry of June 2008 derivatives contracts tomorrow, 26 June 2008, provided a foundation for the recovery. The 30-share BSE Sensex gained 113.49 points or 0.80% at 14,220.07. The broader based S&P CNX Nifty surged 61.55 points or 1.47% at 4,252.65.

On 26 June 2008, short covering ahead of expiry of June 2008 derivatives contracts helped market move higher for the second straight session. However, the market underwent choppy swings throughout the day. The 30-share BSE Sensex gained 201.75 points or 1.42% at 14,421.82. The broader based S&P CNX Nifty was up 63.20 points or 1.49% at 4,315.85.

A setback to stocks in Asia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled bourses on 27 June 2008. The 30-share BSE Sensex slumped 619.60 points or 4.30% to 13,802.22. Intense selling pulled it lower to day’s low of 13,760.78, which is its lowest level in more than 13 months. The broader based S&P CNX Nifty tanked 179.20 points or 4.15% at 4,136.65.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) rose 4.07% to Rs 2181.90 in the week. RIL will start pumping 25 million standard cubic metres a day (mmscmd) of natural gas by September from its D-6 field in the Krishna Godavari basin, the oil ministry said on 25 June 2008. It said in a statement that the output would be raised to 40 mmscmd by March 2009.

India’s second largest private sector bank in terms of net profit HDFC Bank declined 7.31% to Rs 1018.65. 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.

Wipro, the country’s third largest software services exporter fell 6.65% to Rs 442.60. Wipro has reportedly raised close to Rs 1,400 crore (35 billion Yen) through external commercial borrowings (ECBs). The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 including Unza and Infocrossing for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.

Reliance Communications (RCom), the country’s second largest telecom services provider in terms of market capitalisation lost 3.61% to Rs 473.55. RCom’s proposed merger deal with South Africa based global operator, MTN is reportedly expected to close by first week of July 2008.

India’s leading pharma company in terms of sales Ranbaxy Laboratories fell 3.61% to Rs 523.05 after receiving tentative approval from US Food and Drug Administration for manufacturing and marketing valganciclovir hydrochloride tablets in 450 miligram strength.

India’s largest bank in terms of net profit State Bank of India fell 7.15% to Rs 1158.30 after the state-run bank raised its benchmark prime lending rate by 50 basis points to 12.75% with effect from 27 June 2008. The bank made this announcement during trading hours on 26 June 2007.

India’s largest private sector steel manufacturer in terms of sales Tata Steel fell 6.54% to Rs 726.75. The company reported 195.64% jump in consolidated net profit to Rs 12349.98 crore on 415.04% spurt in total income to Rs 132110.09 crore in the year ended March 2008 over the year ended March 2007. The results are non comparable due to merger Corus Group with Tata Steel.

India’s largest private sector bank by assets ICICI Bank plunged 11.10% at Rs 653.10. It hit a 52-week low of Rs 643 on 27 June 2008.

India’s largest engineering and construction firm by revenue Larsen & Toubro fell 11.57% at Rs 2267.15.

India’s second largest software exporter by sales Infosys Technologies fell 6.57% at Rs 1707.60.

India’s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) fell 4.23% to Rs 830.15. Net profit of ONGC fell 2% to Rs 2627.10 on a 26% increase in sales to Rs 15626.07 crore in Q4 March 2008 over Q4 march 2007. The company announced the results during trading hours on 25 June 2007.

The wholesale price index rose 11.42% in 12 months to 14 June 2008, above the previous week's annual rise of 11.05%, government data released on Friday, 27 June 2008, showed. Inflation for the year through 19 April 2008 was revised upwards to 8.23% from 7.57%.

RBI, after market hours on 24 June 2008, raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. The RBI had earlier on 11 June 2008, raised the repo rate, by 25 basis points to 8%.

The RBI also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.

Political uncertainty weighed heavily on the market due to confrontation between the government and Left parties over the Indo-US nuclear deal. The UPA-Left coordination committee on Indo-US nuclear deal on 25 June 2008 cided to meet again later. Foreign Minister Pranab Mukherjee said the committee completed its discussions on all aspects of the nuclear deal. The next meeting of the committee will finalise its findings.

The Left parties have already made it clear that they will withdraw their support to the government if it moves ahead with the nuclear deal. Left parties are opposing the deal saying it undermines India's independent foreign policy and nuclear weapons program.

The finance ministry on 25 June 2008, said the direct tax receipts were up 43.45% to Rs 49411 crore until 21 June 2008, on the back of a higher advance tax payments by corporates. Collection from corporate tax were Rs 30655 crore, up 39.81% from a year-ago, while income tax receipts were up 49.8% to Rs 18756 crore, it said in a statement.