Sensex sheds 843 points on rise in fuel prices

The market declined sharply as a hike in fuel prices by about 10% announced by the Union government on Wednesday, 4 June 2008, triggered possibility of a surge in inflation to double digit level.

The BSE Sensex declined 843.39 points or 5.14% to 15,572.18 in the week ended 6 June 2008. The S&P CNX Nifty fell 242.3 points or 4.97% to 4627.80 in the week.

The BSE Mid-Cap index fell 410.39 points or 6.07% to 6,350.15. The BSE Small-Cap index slumped 436.99 points or 5.37% to 7,696.05.

The government on Wednesday, 4 June 2008, raised petrol by Rs 5 a litre and diesel price by Rs 3 a litre in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation.

The wholesale price index rose 8.24% in the 12 months to 24 May 2008, above the previous week's annual rise of 8.1%, government data released on 6 June 2008 showed. The reading was the highest since 28 August 2004, when it stood at 8.74%. Inflation for the week ended 29 March 2008 was revised upwards to 7.75% from 7.41%.

The 30-share BSE Sensex plunged 352.39 points or 2.15% to 16,063.18 on Monday, 2 June 2008. The broader based S&P CNX Nifty declined 130.5 points or 2.68% to shut shop at 4,739.60.

On 3 June 2008, the market staged a smart intra-day rebound in second half of the day’s trading session led by recovery in Reliance Industries (RIL). The 30-share BSE Sensex settled 100.62 points or 0.63% lower at 15,962.56. The broader based S&P CNX Nifty fell 23.70 points or 0.5% at 4,715.90.

The market witnessed a sell-off on 4 June 2008 after the government announced hike in fuel prices during trading hours. The 30-share BSE Sensex tumbled 447.77 points or 2.81% at 15,514.79. The broader based S&P CNX Nifty was down 130.3 points or 2.76% at 4,585.60.

On 5 June 2008, frenzied buying coupled with short covering after three straight days of fall triggered a solid rally in late trade. The 30-share BSE Sensex gained 254.93 points or 1.64% at 15,769.72. The broader based S&P CNX Nifty was up 91.35 points or 1.99% to 4,676.95.

On 6 June 2008, local benchmark indices underperformed their global peers, hit by rumours that the Reserve Bank of India (RBI) may hike cash reserve ratio (CRR) or interest rate later in the day to tame runaway inflation. The 30-share BSE Sensex declined 197.54 points or 1.25% to settle at 15,572.18. The broader based S&P CNX Nifty was down 49.15 points or 1.05% to 4,627.80.

India's largest state-run oil exploration firm in terms of revenue Oil and Natural Gas Corporation (ONGC) jumped 8.58% to Rs 938.50 in the week. The stock spiraled higher after Union government on Wednesday, 4 June 2008, halved the state-owned upstream company’s subsidy burden in fiscal 2009.

India's largest private sector firm by market capitalization and oil refiner Reliance Industries slipped 6.76% to Rs 2239.35.

India's largest private sector bank by assets ICICI Bank fell 2.21% to 770.85.

India's largest wind turbine maker by sales Suzlon Energy rose 1.06% to Rs 280.20. The firm said it signed a share purchase agreement with Areva for acquisition of latter's total stake of approximately 30% in REpower Systems AG, Germany. This acquisition will consolidate Suzlon's total holding in REpower to around 66%, the company said in a statement to the Bombay Stock Exchange on Friday, 6 June 2008. 2007.

Mumbai-based large-cap natural gas and oil exploration firm Cairn India rose 0.21% to Rs 286.25. The firm was awarded a licence by Sri Lanka to explore for oil & gas in the Mannar basin.

Spicejet surged 10.62% to Rs 35.95. Anil Dhirubhai Ambani Group is reportedly in talks to acquire the Gurgaon-based small-cap low-fare carrier.

Back-office firm HOV Services soared 18.05% to Rs 100.40. The firm received an offer of $202 million for sale of its HOV Services LLC subsidiary and its Honk Kong unit. The payment will be made in a mix of cash and stock.

Foreign institutional investors (FIIs) sold shares worth Rs 3291.20 crore so far in the month of June 2008. They sold shares worth Rs 18660.60 crore in calendar year 2008, till 5 June 2008. Domestic funds sold shares worth Rs 144.20 crore in the month of June 2008, till 4 June 2008.