Sensex bounces back from 2 year lows

The key benchmark indices snapped last three days losses to post decent gains today, 30 September 2008. Sensex rose 264.58 points. The barometer index had lost 1,096.77 points or 8% in the past three trading sessions to 13,102.18 on Monday, 29 September 2008, from a recent high of 13,692.52 hit on 24 September 2008

Expectations that a revised rescue package for the US financial sector would be put forward quickly by the US administration, triggered a recovery on the domestic bourses today, 30 September 2008, after an initial sharp fall that pushed Sensex to 2-year low. The US House of Representatives on Monday, 29 September 2008, unexpectedly rejected a plan to buy toxic assets from struggling banks that had been designed to revitalise strained lending markets. US stock futures were trading higher. Nasdaq futures were up 32.25 points while Dow Jones futures gained 211 points.

Banking stocks climbed. Index pivotal ICICI Bank rose more than 8%, Tata Consultancy Services rose close to 7%. Bharat Heavy Electricals and Bharti Airtel rose more than 5% each.

Finance minister P Chidambaram today said Indian banks are well capitalised and regulated. He further added that foreign institutional investors are not selling all the time.

European markets were trading mixed. France’s CAC 40 and UK’s FTSE 100 were up by between 0.02% to 0.16%. Germany’s DAX was down 0.89%.

The Securities & Exchange Board of India (Sebi) chairman C B Bhave today, 30 September 2008, said he did not have concerns that institutional investors were short-selling stocks and added that no change in the rules governing short selling was expected. The market surveillance system is already in place, Bhave said.

The rejection of the US bailout plan has heightened concerns that more banks will fail and global credit-losses will widen, leading to a global slowdown. The Dow Jones industrial average on Monday, 29 September 2008, posted its largest point decline ever on Monday, and its biggest daily percentage slide since the 1987 stock market crash.

Adding to the woes were troubles in Europe, where authorities were scrambling to prop up a slew of banks. On Tuesday, 30 September 2008, the Belgian-French financial services group Dexia got a 6.4 billion euro ($9.18 billion) capital boost from public shareholders to help it fight the global credit crisis. Ireland also offered to guarantee all bank deposits for two years to improve banks' access to funds on international markets.

Meanwhile, global central banks on Tuesday, 30 September 2008, more than doubled the amount of dollar funding to $620 billion, but the move showed no signs of thawing the freeze in money markets where banks are hoarding cash and bracing for more trouble ahead in the deepening year-long credit crisis.

The BSE 30-share Sensex jumped 264.58 points or 2.1% to 12,860.43. The index shed 442.2 points at the day's low of 12,153.55, hit in early trade, its lowest level in two years. The Sensex rose 399.45 points at day’s high of 15,995.20 hit in mid-afternoon trade.

The S&P CNX Nifty was up 71.15 points or 1.85% to 3,921.20. Nifty hit a low of 3,715.05 in early trade, its lowest level in 17 months.

The BSE Sensex is down 7,426.56 points or 36.6% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8,346.34 points or 39.35% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE clocked a turnover of Rs 5,164 crore today, 30 September 2008 as compared to a turnover of Rs 4,594.16 on 29 September 2008.

Nifty October 2008 futures were at 3923.15, at a premium of 1.95 points as compared to spot closing of 3921.20. NSE's futures & options (F&O) segment turnover was Rs 56,549.63 crore, which was higher than Rs 55,905.71 crore on Monday, 29 September 2008.

The BSE Mid-Cap index was up 1.46% at 4,798.29 and the BSE Small-Cap index was up 0.44% at 5,577.47.

BSE Bankex (up 4.92% to 6,478.85), BSE Capital Goods index (up 3.02% to 10,581.13), BSE Realty index (up 2.96% to 3,508.77), BSE Teck index (up 2.24% to 2,545.91) outperformed Sensex.

BSE Metal index (down 1.66% to 8,992.06), BSE FMCG index (down 0.86% to 2,160.76), BSE HealthCare index (up 0.58% to 3,672.18), BSE IT index (up 1.22% to 3,095.08), BSE Oil & Gas index (up 1.28% to 9,039.28), BSE Auto index (up 1.4% to 3,674.98), BSE Power index (up 1.58% to 2,260.27), BSE PSU index (up 1.62% to 6,246.03) and BSE Consumer Durables index (up 1.98% to 2,929.18) underperformed Sensex.

The market breadth was weak on BSE with 1,277 shares advancing as compared to 1,316 that declined. 79 shares remained unchanged.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 0.8% to Rs 1,946.35. The stock recovered from the session’s low of Rs 1,862.60.

Tata Consultancy Services (up 6.96% to Rs 662.75), Bharat Heavy Electricals (up 5.07% to Rs 1,586), Bharti Airtel (up 5.14% to Rs 785.05), Maruti Suzuki India (up 3.73% to Rs 687.15), Larsen & Toubro (up 4.16% to Rs 2442.90), HDFC (up 5.33% to Rs 2,141.15), Jaiprakash Associates (up 4.12% to Rs 111.10), edged higher from the Sensex pack.

Ranbaxy Laboratories (down 3.17% to Rs 247.75), Tata Motors (down 3.27% to Rs 344.20), Tata Steel (down 4.43% to Rs 425.60), Grasim Industries (down 2.58% to Rs 1,687.60), Sterlite Industries (down 1.02% to Rs 428.45), edged lower from the Sensex pack.

India’s largest private sector bank in terms of net profit ICICI Bank rose 8.42% to Rs 534.85. The stock recovered from the session’s low of Rs 458. ICICI Bank today said rumours about its financial strength were baseless and malicious. The bank said it has a very strong capital position. In a statement, chief executive K.V. Kamath said ICICI's banking and non-banking units were well capitalised and the impact of the current market conditions on its investment portfolio would not pose any challenge to its capital position.

The stock had slumped 12.11% to Rs 493.30 yesterday despite the bank clarifying that 98% of ICICI Bank UK PLC's non-India investment book is rated investment grade and above. ICICI Bank UK PLC has zero exposure to US subprime-credit, it had said.

India’s largest commercial bank State Bank of India rose 4.32% to Rs 1,465.65. It recovered from the session’s low of Rs 1,353. India’s second largest private sector bank by net profit, HDFC Bank, rose 2.46% to Rs 1,229. The stock recovered from session’s low of Rs 1,125.

Reliance Natural Resources clocked the highest volume of 2.33 crore shares on BSE. IFCI (1.27 crore shares), Suzlon Energy (89.37 lakh shares), Chambal Fertilisers and Chemicals (80.36 lakh shares) and Ispat Industries (72.22 lakh shares) were the other volume toppers in that order.

Reliance Capital clocked the highest turnover of Rs 405.22 crore on BSE. Reliance Industries (Rs 356.18 crore), ICICI Bank (Rs 336.95 crore), Larsen & Toubro (Rs 206.55 crore) and Axis Bank (Rs 203.49 crore) were the other turnover toppers in that order.

US stocks slumped on Monday, 29 September 2008 as the House of Representatives rejected the $700 billion bailout plan to rescue the financial system. The S&P 500 index tumbled the most since the 1987 crash and the Dow Jones saw it's biggest single day point fall ever. The Dow Jones Industrial Average plunged 777.68 points, or 6.98%, to 10,365.45. The S&P 500 index fell 106.62 points, or nearly 9%, to 1,106.39. The Nasdaq Composite index declined 199.61 points, more than 9%, to 1,983.73.

Most Asian markets pared initial sharp fall triggered by overnight setback in US stocks. Hong Kong's Hang Seng rose 0.76%. Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul Composite and Taiwan's Taiwan Weighted fell between 0.57% to 4.12%.

US light crude for November 2008 delivery fell 59 cents to $95.78 a barrel today, 30 September 2008 plunging $10.52 its second biggest fall since 23 April 2003, on the previous day.