Sensex sheds 470 points on US financial sector turmoil

Bears ruled the roost on the bourses for the fifth consecutive day as key benchmark indices posted substantial losses after US investment bank Lehman Brothers filed for bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. Nonetheless, news that China's central bank has cut interest rates helped the domestic bourses cut steep intra-day losses. Despite the recovery, the market ended the day with heavy losses, with the BSE Sensex tumbling 469.54 points.

Fears of more foreign fund withdrawals weighed heavily on the Indian bourses today, 15 September 2008, after US investment bank Lehman Brothers filed for bankruptcy protection. The financial sector upheaval also involved other US institutions. Bank of America has agreed to acquire Merrill Lynch & Co for $50 billion in an all-stock deal that will give the US bank the world's largest brokerage.

Index heavyweight Reliance Industries (RIL) rebounded after touching 52-week low. Maruti Suzuki India staged a sharp recovery from day’s low. Banking pivotals also rebounded from early lows after China's central bank today, 15 September 2008, cut benchmark lending rates by 0.27%. All the BSE sectoral indices declined with stocks from IT and real estate worst hit. Shares of firms with substantial holding by Lehman Brothers as a foreign institutional investor including its holdings in sub-accounts, tumbled.

As per provisional data released by the stock exchanges after trading hours, foreign funds today, 15 September 2008, sold shares worth a net Rs 763.02 crore. Domestic funds bought shares worth a massive Rs 1,328.14 crore.

US stock index futures were down sharply, pointing to a steep fall at the opening on Wall Street. European markets which opened after Indian markets were weak. Key benchmark indices in UK, Germany and France were down by between 4.28% and 5.25%. Asian markets were trading lower today, 15 September 2008. Key benchmark indices in Taiwan and Singapore fell 4.09% and 3.27% respectively. Most major Asian equity markets were closed for public holidays.

The BSE 30-share Sensex lost 469.54 or 3.35% at 13,531.27. The Sensex opened with a downward gap of 334.53 points at 13,666.28, which also remained its day's high. At the day’s low of 13,150.81 hit in mid-morning trade, the Sensex lost 850 points.

The S&P CNX Nifty lost 155.55 points or 3.68%, to settle at 4072.90. It had touched an intra-day low of 3,955.40. Nifty September 2008 futures were at 4093.15, at a premium of 20.25 points as compared to spot closing. NSE's futures & options (F&O) segment turnover was Rs 61,185.99 crore, which was higher than Rs 57,492.96 crore on Friday, 12 September 2008.

Sensex has lost 1,413.70 points or 9.45% in five trading sessions from a recent high of 14,944.97 on 8 September 2008. The barometer index is down 6755.72 points or 33.30% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7657.50 points or 36.19% below its all-time high of 21,206.77 struck on 10 January 2008.

The market breadth was extremely weak on BSE with 2258 shares declining as compared to just 375 that rose. 38 remained unchanged. 27 out of the 30 Sensex stocks suffered losses.

The BSE Mid-Cap index fell 4.49% to 5,288.59 and BSE Small-Cap index lost 4.93% to 6,380.47.

The total turnover on BSE amounted to Rs 4468 crore as compared to Rs 5,103.17 crore on Friday, 12 September 2008.

India’s largest private sector power generation company in terms of sales, Reliance Infrastructure tumbled 9.93% to Rs 837 on 17.35 lakh shares. It was the top loser from Sensex pack.

IT pivotals tumbled due to heavy selling on reports that hedging positions taken by the companies are improper with rupee falling to two-year low against the dollar. India’s fourth largest software services exporter Satyam Computer Services slumped 9.61% to Rs 367.50 and was the worst hit among the IT pivotals.

Other IT stocks Wipro (down 4.47% to Rs 401), Infosys (down 4.08% to Rs 1577), TCS (down 5.94% to Rs 760.15), edged lower.

Banking pivotals rebounded from early lows. India's largest private sector bank in terms of net profit ICICI Bank slipped 4.11% to Rs 626, off day’s low of Rs 595.15. India’s largest state run bank in terms of net assets State Bank of India fell 1.68% to Rs 1486.95 , off day’s low of Rs 1405.25

China's central bank, acting against a background of extreme stress in global financial markets, cut benchmark lending rates by 27 basis points to 7.20% today, 15 September 2008. The People's Bank of China (PBOC) also cut the reserve requirement for all except the country's five biggest banks and the Postal Savings Bank by 1%. The PBOC said the aim of the easing was to maintain fast and stable economic growth.

India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries slumped 2.98% to Rs 1873.80 on 19.05 lakh shares. The stock hit a 52-week low of Rs 1824.10 in intra-day trade. The stock slumped on reports the government may impose a special oil tax on the domestic crude oil production under the New Exploration Licensing Policy.

Other oil & gas stock, Essar Oil (down 9.33% at Rs 168.05), Cairn India (down 7.47% at Rs 205.10), and Oil & Natural Gas Corporation (down 6.74% at Rs 959.90), slumped.

Realty shares cracked on intense selling pressure. DLF (down 7.72% to Rs 431.80), Unitech (down 7.67% to Rs 143.25), Indiabulls Real Estate (down 6.05% to Rs 237.50), Ansal Infrastructure (down 11.81% to Rs 78), Housing Development Infrastructure (down 12.11% to Rs 241), slumped.

Metal shares slipped. Ispat Industries (down 6.99% to Rs 21.30), Jindal Steel & Power (down 5.62% to Rs 1497), Hindalco (down 5% to Rs 115), Sesa Goa (down 4.71% to Rs 129.50), and Tata Steel (down 4.77% to Rs 498.50), slipped.

Ranbaxy Laboratories, India’s top drug maker by sales fell 8.78% to Rs 414.10. The stock has been on sustained downtrend ever since the Japanese drug maker Daiichi Sankyo’s open offer to acquire an additional 20% stake at Rs 737 a share in the company ended on 4 September 2008.

Reliance Communications (down 6.23% to Rs 366.80), Jaiprakash Associates (down 6.51% to Rs 147.30), and Tata Motors (down 5.26% to Rs 390.20), edged lower from Sensex pack.

India’s top small car maker by sales Maruti Suzuki India staged a smart recovery from day’s low of Rs 666. It rose 2.03% to Rs 718 and was the top gainer from Sensex pack. As per reports, the company may sell a million units in the domestic market within the next two years.

HDFC (up 1.33% to Rs 2208), and ACC (up 0.41% to Rs 593), were the other gainers from Sensex pack.

Shares of firms with substantial holding by Lehman Brothers as a foreign institutional investor including its holdings in sub-accounts, tumbled. GTC Industries (down 10.95% to Rs 111), KPIT Cummins Infosystems (down 11.83% to Rs 49.60), Orbit Corporation (down 10.69% to Rs 246), Development Credit Bank (down 11.02% to Rs 42.80), IVRCL Infrastructures (down 7.11% to Rs 257.50), Edelweiss Capital (down 6.67% to Rs 484), Moser Bear (down 5.72% to Rs 100.50), Triveni Engineering (down 7.11% to Rs 80.30), and NIIT (down 4.78% to Rs 75.75), plunged.

Reliance Capital was the top traded counter on BSE with turnover of Rs 426.75 crore followed by Reliance Industries (Rs 354.25 crore), Reliance Infrastructure (Rs 146.20 crore), ICICI Bank (Rs 137.70 crore) and Larsen & Toubro (Rs 134.40 crore) in that order.

Reliance Natural Resources led the volumes chart on BSE notching volumes of 1.67 crore shares followed by IFCI (1.33 crore shares), K S Oils (84.85 lakh shares), Relaince Petroleum (81.45 lakh shares) and Chambal Fertilisers (75.50 lakh shares) in that order.

Emami fell 1.79% to Rs 282.80 after the company said it was more than doubling the open offer price for 20% stake in Zandu Pharmaceutical Works to Rs 15,000 a share, from Rs 7,315 earlier. Shares of Zandu Pharmaceutical Works were down 5% at 16,728 on BSE. The company made the announcement during market hours today, 15 September 2008.

Sun Pharmaceuticals Industries declined 1.17% to Rs 1470.55 even as the company said on Friday, 12 September 2008, it has received US Food and Drug Administration approval for the generic Fosamax, alendronate sodium tablets.

Crompton Greaves lost 1.33% to Rs 248.65 after the company said it has acquired US-based electric power systems contractor, MSE Power Systems, and two of its group firms for an enterprise value of $16 million. The company made this announcement before trading hours today, 15 September 2008.

Titagarh Wagons slipped 6.81% to Rs 662 after the company said on Monday, 15 September 2008, it would acquire the entire ownership and management control of a non-banking financial company. The company made this announcement before trading hours today, 15 September 2008.

US light crude for October 2008 delivery fell $1.52 to $99.66 a barrel today, 15 September 2008 on early signs that Hurricane Ike may have spared key Gulf Coast infrastructure, although traders were cautious on Monday as they awaited status reports on more Texas refineries.

US markets ended mixed on Friday, 12 September 2008, amid uncertainty over the fate of troubled investment bank Lehman Brothers. But shares of natural resource companies and utilities gained as commodity prices rose, offsetting losses among financial and bank shares. The Dow Jones industrial average slipped 11.72 points, or 0.10%, to 11,421.99. The S&P 500 index gained 2.65 points, or 0.21%, to 1,251.70, and the Nasdaq Composite index advanced 3.05 points, or 0.14%, 2,261.27.