Market falters on expiry of September 2008 derivatives contracts

The key benchmark indices ended the volatile session in the red. The BSE 30-share Sensex lost 145.34 points. The weakness on the bourses was linked to the expiry of the September 2008 derivative contracts as well as uncertainty hovering over the US government's $700 billion rescue plan for the financial sector. Investors also preferred staying on the sidelines ahead of the weekly inflation data to be released after market hours today, 25 September 2008.

As per provisional data released by the stock exchanges after trading hours, foreign funds today, 25 September 2008, sold shares worth a net Rs 1050.38 crore. Domestic funds bought shares worth a net Rs 605.59 crore.

All the sectoral indices on BSE, barring the Auto index, were negative. Software, realty and power shares took major beating. India’s third largest software exporter by sales Wipro was the top lower from the Sensex pack.

The BSE 30-share Sensex shed 145.34 points or 1.06% to 13,547.18. The index opened 24.36 points up at 13,879.06, which was also its highest point for the day. Soon, unabeted selling drove the Sensex 261.84 points down at the day's low of 13,430.68 by mid-afternoon.

The S&P CNX Nifty was down 50.70 points or 1.22% to 4110.55. Nifty October 2008 futures were at 4112.50, at a premium of 41.45 points as compared to spot closing.

The BSE Mid-Cap index was down 0.66% at 5,093.05 and the BSE Small-Cap index was down 0.84% at 6,050.03.

The market breadth was weak on BSE with 899 shares advancing as compared to 1688 that declined. 78 shares remained unchanged.

BSE clocked a turnover of Rs 5054 crore as against Rs 4,319.28 crore on 24 September 2008. NSE's futures & options (F&O) segment turnover was Rs 82697.69 crore, which was higher than Rs 67051.71 crore on Wednesday, 24 September 2008.

Software shares tumbled on growing worries about outsourcing prospects amid a global financial turmoil. Wipro (down 4.81% at Rs 352.90), TCS (down 3.26% at Rs 690.20), Satyam Computer (down 1.75% at Rs 328.05), and Infosys Technologies (down 1.23% at Rs 1504.95), slipped. The BSE IT index underperformed the Sensex, falling 2.01% at 3,348.42. Indian software firms earn more than half of their revenue from the US market.

India’s largest drug maker by sales Ranbaxy Laboratories slipped 4.70% to 296.20. As per recent reports, the Canadian drug regulator, Health Canada, issued a notice to Ranbaxy saying it will be particularly cautious about drug marketing applications from Ranbaxy after the US drug regulator blocked the sale of more than 30 generic medicines made in two factories by the company.

World's larest steel maker Tata Steel fell 0.13% to Rs 485.05. Around 1 crore shares, or 1.37% of its equity, changed hands in two block deals on BSE at a weighted average price of Rs 486.50 each.

India's largest aluminium producer by sales Hindalco Industries fell 4% at Rs 104.50. It came off from a 52-week low of Rs 103.75, hit in mid-afternoon trade. The company's Rs 5,050 crore rights share offer opened for subscription Monday, 22 September 2008. The sale in a ratio of three shares for every seven held at Rs 96 a share will close on 10 October 2008. The company aims to use the funds to repay a bridge loan it had taken to buy Canada's Novelis in 2007.

Sterlite Industries fell 2.13% at Rs 477.15. Yesterday, 24 September 2008, the Sterlite stock had ended 8.36% higher after the company dropped a restructuring plan. From a recent high of Rs 622.35 on 8 September 2008, the stock had tumbled 27.7% to Rs 449.95 on 23 September 2008 after parent Vedanta Resources said it will transfer Sterlite's aluminium and energy businesses to Madras Aluminium Company as part of restructuring. The restructuring of the Vedanta group was planned to result in three units focused on commodities produced by the group: copper, zinc and lead; aluminium and energy; and iron ore.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) declined 1.10% at Rs 2025.

Realty shares tumbled. Indiabulls Real Estate (down 5.17% at Rs 198.05), Unitech (down 0.54% at Rs 120.75), and DLF (down 2.81% at Rs 389), declined. The BSE Realty index underperformed the Sensex, falling 1.96% to 3,840.21.

Akruty City fell 4.20% at Rs 960.35, after hitting a high of Rs 1035 in early trade. The stock advanced 35.40% in six trading sessions to Rs 1002.50 on 24 September 2008 from Rs 740.35 on 16 September 2008.

According to reports, the stock rallied in past six sessions because Indiabulls Financial Services had acquired around 5.5 lakh shares on 12 September 2008. This was a pledge made by the company to Indiabulls Financial Services. Indiabulls Financial Services, via pledge of equity shares would hold around 5.62% stake in the company. Hence, Indiabulls Financial Services have been buying shares and supporting the price at this level, reports suggest.

Banking shares were mixed. India’s largest private sector bank by market capitalisation ICICI Bank fell 0.69% to Rs 596. Canara bank (down 4.10% at Rs 199.05), Yes Bank (down 3.30% at Rs 127.45), and State Bank of India (down 1.63% at Rs 1493.80), fell. However, HDFC Bank (up 1.28% at Rs 1298.30), Axis Bank (up 1.51% at Rs 721.25), and Indian Overseas Bank (up 3.66% at Rs 106.25), moved higher. The BSE Bankex outperformed the Sensex, falling 0.34% to 6,863.47.

Auto shares outperformed the Sensex. Hero Honda Motors (up 2.07% at Rs 861.95), TVS Motor Company (up 1.54% at Rs 32.95), and Maruti Suzuki (up 0.38% at Rs 703.50), moved up.

India's largest commercial vehicle maker Tata Motors fell 1.03% at Rs 383.95. The BSE Auto index outperformed the Sensex, rising 0.08% to 3,852.54.

Tata Steel clocked a highest turnover of Rs 548.55 crore on BSE. Reliance Capital (Rs 355.12 crore), Reliance Industries (Rs 287.55 crore), Akruti City (Rs 207.50 crore), and Austral Coke & Projects (Rs 187.97 crore), were the other turnover toppers on BSE in that order.

Tata Steel reported a highest volume of 1.12 crore shares on BSE. Reliance Natural Resources (89.80 lakh shares), IFCI (72.89 lakh shares), Austral Coke & Projects (71.95 lakh shares), and Sesa Goa (54.96 lakh shares), were the other volume toppers on BSE in that order.

Steel pipe maker Man Industries spurted 10.26% at Rs 61.80 after the company said it received orders worth Rs 1100 crore in the current quarter for spirally-welded pipes. The company's total order book now stands at Rs 1500 crore, with exports accounting for over 26%.

Cigarette maker Golden Tobacco surged 8.57% at Rs 138.65 after the company said on Wednesday, 24 September 2008 evening its board had approved spinning off the tobacco and real estate businesses into two separate companies.

Wind turbine maker Suzlon Energy dipped 7.17% at Rs 182 after the company said its board would consider a rights issue to raise up to Rs 1800 crore on 27 September 2008. According to reports, the investors were worried the issue would lead to equity dilution.

The September 2008 derivatives contracts expired today. By Wednesday, 24 September 2008, roll over in Nifty stood at about 44% from September 2008 contracts to October 2008 contracts.

European markets, which opened after Indian market, rose led by banks and insurers and tracking gains in US index futures on hopes for an emergency meeting to hammer out details of a rescue plan for the US financial sector. Key indices in UK, France and Germany were up 0.09% to 0.87%.

Asian markets, which opened before Indian markets, were mixed. Key benchmark indices in Japan, Singapore, Hong Kong and Taiwan were down by between 0.15% to 1.35%. Key benchmark indices in South Korea, and China were up by between 0.38% to 3.64%.

The BSE Sensex is down 6739.81 points or 33.22% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7659.59 points or 36.11% below its all-time high of 21,206.77 struck on 10 January 2008. The index is down 3.52% or 495.14 points from a recent high of 14042.32 hit on 19 September 2008.