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Wednesday, August 13, 2008

Market extends fall on weak global cues


The market ended lower for the second day in a row tracking weak global markets. The key benchmark indices were highly volatile throughout the session ahead of the outcome of the Securities and Exchange Board of India’s board meet to review the rules regarding the issuance of participatory notes.

Banking and realty shares witnessed selling pressure, while buying was seen in pharmaceuticals and technology stocks. Index pivotal ICICI Bank was the biggest loser in the Sensex pack.

In Europe, key indices in UK, France and Germany were down 0.65% to 0.79%. Asian markets were weak. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were down by between 0.02% to 2.11%.

The BSE 30-share Sensex fell 119.01 points or 0.78% to 15,093.12. Sensex rose 60.43 points at the day's high of 15,272.56 hit in early afternoon deals. At the day’s low of 15,013.06, the Sensex lost 199.07 at the onset of trading session.

The S&P CNX Nifty fell 23.2 points or 0.51% lower at 4529.05. Nifty August 2008 futures were at 4562, a premium of 32.95 points as compared to spot closing.

As per provisional data released by the stock exchanges after trading hours, foreign funds today, 13 August 2008, sold shares worth a net Rs 915.58 crore. Domestic funds bought shares worth a net Rs 226.12 crore.

The BSE Mid-Cap index fell 0.10% at 5,929.37 and the BSE Small-Cap index rose 0.13% at 7,229.77.

The market breadth, which was strong earlier, turned negative by mid-afternoon trade. On BSE, 1238 shares advanced as compared to 1420 that declined. 91 shares remained unchanged.

BSE clocked a turnover of Rs 5052 crore as against Rs 5,874.74 crore on Tuesday, 12 August 2008. NSE’s futures & options turnover amounted to Rs 43947.06 crore as compared to Rs 52461.81 crore Tuesday, 12 August 2008.

Profit taking after a recent solid surge pulled the barometer index down 291.79 points or 1.88% to 15,212.13 on Tuesday, 12 August 2008. The barometer index is down 410.80 points or 2.64% from a recent high of 15503.92 hit on 11 August 2008.

Sensex is down 5193.87 points or 25.60% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6113.65 points or 28.82% away from its all-time high of 21,206.77 struck on 10 January 2008.

Prominent Sensex losers in today's trade were, Reliance Infrastructure (down 2.45% at Rs 1067.85), HDFC (down 2.13% at Rs 2414.10), Larsen & Toubro (down 1.88% at Rs 2795.85), and Tata Power (down 1.76% at Rs 1018.95).

India’s largest private sector bank by market capitalisation ICICI Bank slipped 3.77% at Rs 710.55.

Other banking shares that declined were, Bank of Baroda (down 4.61% at Rs 271.30), HDFC Bank (down 3.69% at Rs 1217.20), and State Bank of India (down 0.15% at Rs 1555.25). The BSE Bankex underperformed the Sensex, falling 2.23% to 7,271.40.

Realty shares slipped. DLF (down 3.29% at Rs 548.60), Mahindra Lifespace Developers (down 4.61% at Rs 467.50), and Housing Development Infrastructure (down 4.05% at Rs 466.55), declined. The BSE Realty index underperformed the Sensex, falling 1.31% to 5,610.83.

Pharmaceutical shares rose. Sun Pharma Advanced Research Company (up 5.50% at Rs 89.20), Glenmark Pharmaceuticals (up 4.04% at Rs 635.40), Divi's Laboratories (up 4.01% at Rs 1593.65), and Cipla (up 3.15% at Rs 232.15). However, India's largest drug maker by sales Ranbaxy Laboratories fell 0.26% at Rs 499.05. The BSE Healthcare index outperformed the Sensex, rising 1.05% to 4,279.90.

Drug maker Dr Reddy's Pharmaceuticals rose 0.17% at Rs 600.25. As per reports, the company and Teva Pharmaceuticals have settled their patent dispute over carvedilol, allowing Dr Reddy's to sell the drug in the US.

IT shares moved up after the rupee weakened against the dollar. India's second largest software exporter by sales Infosys Technologies rose 1.34% at Rs 1625.20. TCS (up 1.20% at Rs 828.05), Satyam Computer (up 0.87% at Rs 406.25), and Wipro (up 0.05% at Rs 433.50), rose. The BSE IT index outperformed the Sensex, rising 1.11% to 3,813.96.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries ended flat at Rs 2340.90. As per reports, the Bombay High Court on Tuesday, 12 August 2008, once again adjourned the hearing of a dispute between the company and Reliance Natural Resources (RNRL) till 21 Aug 2008. The dispute is about, which firm has the rights over gas supplies and at what price. Reliance Natural Resources rose 1.66% at Rs 103.90.

Worlds sixth largest steel maker Tata Steel rose 0.41% at Rs 610.45 after the company said its Singapore unit signed a joint venture agreement with Vietnam Steel Corp and Vietnam Cement Industries to build a steel complex in the Southeast Asian country.

India’s largest aluminium manufacturer in terms of sales Hindalco Industries fell 2% to Rs 139.55. The company said its board will meet on 14 August 2008 to determine the price and other terms and conditions of the proposed rights offering. As per reports, Hindalco will set rights issue price at Rs 96 per share.

Majority of the 39 stocks that will be included in the derivative segment of National Stock Exchange from 21 August 2008 spurted on hopes that it will boost liquidity. Noida Toll Bridge Company (up 15.90% at Rs 49.20), Core Projects & Technologies (up 10.93% at Rs 254.20), Dish TV India (up 10.26% at Rs 39.75), UCO Bank (up 10.12% at Rs 40.80), and K S Oils (up 10% at Rs 65.30), were the prominent gainers among the 39 scrips that will be included for futures and options trading on NSE from 21 August 2008.

Infrastructure developer BSEL Infrastructure Realty surged 5% to Rs 38.95 after the company said its board will meet on 20 August 2008 to consider the funding of $100 million for ongoing and future projects of the company.

Cable TV network distributor Wire & Wireless India gained 2.29% to Rs 26.75 after the company said its board will meet on 20 August 2008 to consider issue of equity shares on a rights basis.

Real estate firm Puravankara Projects rose 1.03% at Rs 200.70 after the company said it will set up a unit for low-cost housing and invest Rs 8000 crore over five years to develop 60 million square feet of land.

Auto parts maker JBM Auto rose 4.08% to Rs 35.70 after the company said it will invest Rs 245 crore in a plant in Pune to supply skin panels for the joint venture between Tata Motors and Fiat.

Reliance Natural Resources clocked a highest turnover of Rs 252.72 crore on BSE. Reliance Capital (Rs 237.79 crore), Reliance Industries (Rs 214.15 crore), Vishal Information Technologies (Rs 213.18 crore), and ICICI Bank (Rs 136.86 crore), were the other turnover toppers on BSE in that order.

Reliance Natural Resources registered a highest volume of 2.44 crore shares on BSE. Chambal Fertilisers & Chemicals (1.13 crore shares), Nagarjuna Fertilisers & Chemicals (1.09 crore shares), Ispat Industries (1 crore shares), and Vishal Information Technologies (93.19 lakh shares), were the other volume toppers on BSE in that order.

US stocks fell on Tuesday, 12 August 2008, as bank shares tumbled on fresh worries about the economy and further losses stemming from the mortgage crisis. The Dow Jones industrial average fell 139.88 points, or 1.19%, to 11,642.47, while the Standard & Poor's 500 Index slid 15.73 points, or 1.21%, to 1,289.59. The Nasdaq Composite Index dropped 9.34 points, or 0.38%, to 2,430.61.

Oil extended its sharp decline witnessed over the past few days. US crude oil for September delivery fell $1.44 to settle at $113.01 a barrel on Tuesday, 12 August 2008, on the New York Mercantile Exchange on concerns about a slowing economy and a drop in demand.

India's industrial output rose 5.4% in June 2008 from a year earlier, above the previous month's upwardly revised 4.1%, data released by the government on Tuesday, 12 August 2008, showed. The growth was much lower than double-digit growth seen in 2006 and early 2007.

The board of market regulator Securities & Exchange Board of India will review the regulatory framework governing participatory notes (PNs), at its meeting today, 13 August 2008. As per reports, Sebi may extend the period for unwinding participatory notes, or P-notes, on underlying derivatives from 18 months to 24 months. P-notes are issued by foreign institutional investors registered in India to unregistered overseas investors.

The market regulator put curbs on PNs last year to help the government keep track of foreign flows into the country. Sebi had restricted issuance of P-notes in the spot segment to 40% of assets under custody and reports sugest it might raise the cap to 45% from 40%.