Market registers seventh straight weekly loss

The key benchmark indices slumped to 15-month low in choppy trade as a political rift over nuclear deal, soaring crude oil prices, high inflation and sustained selling by by foreign institutional investors (FIIs) depressed market sentiment. A number of stocks and sectoral indices tumbled to 52-week low.

The barometer index BSE Sensex lost 348.22 points or 2.52% to 13,454 in the week ended Friday, 4 July 2008. The S&P CNX Nifty lost 120.65 points or 2.91% to 4,016 in the week.

From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7752.77 points or 36.55%. It has shed 6832.99 points or 33.68% in calendar year 2008 thus far from its close of 20286.99 on 31 December 2007.

The BSE Mid-Cap index declined 280.51 points or 5.04% to 5,278.24 in the week. The BSE Small-Cap index slumped 488.40 points or 7.03% to 6,449.67 in the week. The BSE Mid-Cap and BSE Small-Cap indices slumped to 52-week lows of 4970.47 and 6938.07 respectively during the week.

FII outflow outflow in calendar year 2008 totaled Rs 26571 crore (till 3 July 2008).

Mutual funds bought shares worth a net Rs 347.49 in the first three days this month. They had pumped Rs 3179.20 crore in Indian equity market in June 2008.

Trading for the week started on bearish note as high inflation, rising interest rates, record high oil prices and political concerns haunted the markets. The 30-share BSE Sensex plunged 340.62 points or 2.47% at 13,461.60 and the broader based S&P CNX Nifty was down 96.1 points or 2.32% at 4,040.55 on Monday 30 June 2008.

Sell-off on the bourses continued on Tuesday, 1 July 2008, pulling key benchmark indices below psychological levels - the barometer index BSE Sensex fell below 13,000 mark and the S&P CNX Nifty fell below 4,000. The 30-share BSE Sensex plunged 499.92 points or 3.71% at 12,961.68 and the broader based S&P CNX Nifty was down 158.8 points or 3.56% at 3,896.75, on that day.

The market staged a solid rebound on Wednesday, 2 July 2008 with the 30-share BSE Sensex clocking its biggest intra-day gain since 25 March 2008. The 30-share BSE Sensex surged 702.94 points or 5.42% at 13,664.62 and the broader based S&P CNX Nifty rose 196.6 points or 5.05% at 4,093.35 on that day. Both the niche indices had struck 15-month low in intra-day trade on that day. The Sensex hit a low of 12,822.75 and Nifty had hit a low of 3,848.25.

A surge in oil price to a record high above $144 a barrel and overnight fall in US stocks weighed on the investor sentiment on Thursday, 3 July 2008. The 30-share BSE Sensex slumped 570.51 points or 4.18% at 13,094.11 and the broader based S&P CNX Nifty was down 167.6 points or 4.09% at 3,925.75, on that day.

The market rallied on Friday, 4 July 2008, shrugging off higher inflation on hopes a political turmoil arising from Indo-US nuclear deal may be averted. The 30-share BSE Sensex rose 359.89 points or 2.75% at 13,454 and the broader based S&P CNX Nifty was up 90.25 points or 2.30% at 4016, on that day.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) fell 3.80% to Rs 2,099 in the week.

India’s second largest telecom services provider by sales Reliance Communications (RCom) fell 7.46% to Rs 438.20. The stock hit a 52-week low of Rs 381.05 during the week. As per reports, Mukesh Ambani-controlled Reliance Industries (RIL) on Thursday, 3 June 2008 shot off another letter to Reliance Communications (RCOM) invoking a right of first refusal (RoFR). A copy of the letter was also sent to South African telco MTN with which RCOM is negotiating a deal, the exact contours of which are not yet clear.

India’s largest commercial vehicle maker by sales Tata Motors plunged 10.74% to Rs 400.85. The stock hit a 52-week low of Rs 383 during the week. The company said high input costs, rising interest rates and slowing demand would dent sales of commercial and passenger vehicles in the year to March 2009.

Banking and financial stocks were in action during the week. India's largest dedicated housing finance company HDFC said on Monday, 30 June 2008, its prime lending rate would go up by 50 basis points from Tuesday, 1 July 2008. The stock rose 0.13% to Rs 2055.45 in the week. It struck a 52-week low of Rs 1750.15 during the week.

India's largest private bank in terms of net profit ICICI Bank said rates on consumer loans would rise by 75 basis points. The stock lost 8.03% to Rs 600.65 in the week. The stock hit a 52-week low of Rs 551.30 during the week. Both HDFC and ICICI Bank also raised deposit rates between 50-100 basis points.

India’s largest commercial bank State Bank of India fell 2.88% to Rs 1127.50. The stock hit a 52-week low of Rs 1007 during the week. On 26 June 2008, the bank raised its benchmark prime lending rate by 50 basis points to 12.75% after the central bank aggressively tightened policy in the face of surging inflation.

India's largest oil exploration company in terms of market capitalisation ONGC gained 5.56% to Rs 876.30. The company has reportedly discovered a new oil field in the Farsi oil bloc of the Persian Gulf. ONGC will undertake the development of the newly discovered field upon determining that its development is economically feasible.

Capital goods stocks advanced on fresh buying. India’s largest engineering and construction firm by sales Larsen & Toubro rose 4.97% to Rs 2379.85. The stock hit a 52-week low of Rs 2100 during the week. The company received an order wroth Rs 1,557 crore from Andhra Pradesh Power Development Company for the supply of steam turbine generators.

India's biggest power equipment maker in terms of revenue, Bharat Heavy Electricals advanced 8.68% to Rs 1500.30 after securing an order exceeding Rs 2080 crore for a 400-megawatt thermal power project in Syria.

IT stocks were mixed. Satyam Computer Services (up 5.08% to Rs 462.15), and Infosys (up 2.80% to Rs 1755.40), gained. However Wipro (down 3.05% to Rs 429.10), and Tata Consultancy Services (down 2.48% to Rs 843.75) edged lower.

Sejal Architectural Glass, a glass processing house in India, settled at Rs 81.50 on 1 July 2008, a discount of 29.13% over the issue price of Rs 115 per share.

On 3 July 2008, Avon Weighing Systems, maker of platform scales and weighbridges, settled at Rs 11.90, a 19% premium over its issue price of Rs 10.

On 4 July 2008, Archidply Industries, engaged in the business of wooden interior products, settled at Rs 50.45, a discount of 31.82% over the initial public offer price of Rs 74.

India's wholesale price index rose 11.63% in the 12 months to 21 June 2008, above the previous week's annual rise of 11.42%, government data released on 4 July 2008 showed.

As per reports, India's monsoon has been 21% above average so far this season. A normal monsoon may lift farm production, which accounts for a fifth of the economy, and cool the nation's fastest inflation rate in 13 years.

Communist parties on 4 July 2008 said the government must tell them by Monday, 7 July 2008, if it plans to press ahead with the next step in a controversial civilian nuclear deal with the United States. Left parties have threatened to end their backing for the government if it seeks approval for the deal from the International Atomic Energy Agency (IAEA), the next international move needed to operationalise the pact.

Left parties also decided to launch a national campaign from 14 July 2008 to explain its opposition to the nuclear deal and over runaway inflation.

The government is seeking support from the Samajwadi Party (SP), a key regional party in Uttar Pradesh to retain power at a time when Left parties are on the verge of withdrawing support. SP party leaders today met Prime Minister Manmohan Singh and hinted that they would approve the deal

SP has 39 seats in parliament, compared with 59 for the communist parties. The Congress-led ruling coalition needs the support of 44 lawmakers to reach a majority. It would try and win the other five seats from smaller parties

Meanwhile, visiting US Congressman Gary Ackerman informed that India will have to complete all formalities by September 2008 if it wanted the Indo-US civilian nuclear energy cooperation agreement to go through since the presidential elections in the US will be held in November 2008. He added that the progress was slow at the moment.