Indian market underperforms global peers as Sensex tanks nearly 6%

Worries over liquidity conditions in the financial system and weak global markets pulled the domestic bourses sharply lower today. The BSE Sensex which opened about 240 points lower on weak global cues extended the losses and showed no sign of recovery to end 674.28 points or 5.87%. At the day’s low Sensex was down 725 points. Reliance Industries slumped. The Indian market vastly underperformed Asian and European stocks which fell between 0.8% to 3.7%.

US, euro zone and Japanese economies are all widely expected to slip into recessions, threatening growth in emerging markets. Recession fears returned to centre stage today after trillions of dollars pledged for bank bailouts from Europe to Asia helped allay fears of an imminent financial meltdown. Trading in US index futures suggested the Dow would fall 142 points at the opening bell.

The Reserve Bank of India's extension of banks' special short-term lending (repo) facility to mutual funds, which have been witnessing redemption pressure, failed to avert the slide on the bourses.

Larsen & Toubro fell more than 11% after it announced its Q2 September 2008 results. Reliance Communications and Reliance Infrastructure fell more than 12 % each. Jaiprakash Associates fell 14.47%. The market breadth was weak as selling was witnessed across the board. Capital goods and Consumer durables stocks plummeted.

The BSE 30-share Sensex ended 674.28 points or 5.87% lower at 10,809.12. The index declined 723.07 points at the day's low of 10,760.33 hit in late trade. The Sensex fell 226.35 points at day’s high of 11,257.15, in early trade.

The S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40.

BSE clocked a turnover of Rs 3,372 crore today as compared to a turnover of Rs 4,252.13 crore on 14 October 2008.

Nifty October 2008 futures were near spot price at 3339.10, as compared to spot closing of 3338.40. NSE's futures & options (F&O) segment turnover was Rs 43,996.07 crore, which was lower than Rs 47,278.06 crore on Tuesday, 14 October 2008.

The barometer index BSE Sensex is down 9,477.87 points or 46.71% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,397.67 points or 49.02% below its all-time high of 21,206.77 struck on 10 January 2008.

As per the provisional figures on BSE, Foreign institutional investors (FII)s sold shares worth Rs 1,030.79 crore today,15 October 2008 and domestic funds bought shares worth Rs 669.96 crore.

The BSE Mid-Cap index was down 4.41% at 3,720.48 and the BSE Small-Cap index was down 4.82% at 4,393.45. Both the indices outperformed the Sensex.

BSE Capital Goods index (down 8.88% to 8,088.01), BSE Consumer Durables index (down 8.79% to 2,125.85), BSE Metal index (down 7.82% to 6,315.85), BSE Teck index (down 6.03% to 2,230.60), BSE Power index (down 6.02% to 1,905.72) underperformed the Sensex.

BSE HealthCare index (down 2.24% to 3,328.35), BSE Bankex (down 3.25% to 5,841.60), BSE Auto index (down 3.48% to 3,309.46), BSE PSU index (down 3.53% to 5,555.49), BSE FMCG index (down 3.65% to 1,870.08), BSE Realty index (down 4.61% to 2,675.48), BSE Oil & Gas index (down 5.15% to 7,230.87) and BSE IT index (down 5.43% to 2,780.19), outperformed the Sensex.

The market breadth was weak. On BSE, 499 shares advanced as compared to 2,117 that declined. 39 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries was down 6.2% to Rs 1,519.25 on fears the company may report fall in its gross refining margins in Q2 September 2008 over Q2 September 2007 largely due to sluggish demand for petroleum products in key Western markets.

All the 30 Sensex constituents were in the red. Reliance Communications (down 12.24% to Rs 235.80), Sterlite Industries (down 10.11% to Rs 292.15), Jaiprakash Associates (down 14.47% to Rs 72.70) and Tata Steel (down 10.35% to Rs 273.25) were the major losers from the Sensex pack.

India’s largest engineering and construction firm Larsen & Toubro declined 11.01% on profit taking after it announced Q2 results. The company’s net profit rose 32.25% to Rs 460.26 crore on 41.98% to Rs 7,842.26 crore in Q2 September 2008 over Q2 September 2007. The firm announced the result today during the market hours.

Bharat Heavy Electricals and Suzlon Energy fell between 6.28% to 7.56%.

Consumer durables stocks tumbled on fears the credit crunch and the stock market crash might hit sales this festive season. Titan Industries, Videocon Industries and Gitanjali Gems fell between 5.4% to 14.05%.

India's top mobile operator by market share Bharti Airtel was down 5.95%. The company today said it had tied up with Infosys Technologies, India’s second largest IT services provider by sales Infosys, to deliver its direct-to-home (DTH) television service. Infosys plunged 5.72%. As part of the agreement, Infosys will provide technology products that will help Bharti to offer digital and interactive applications on its DTH TV service.

Reliance Infrastructure was down 12.11%. Reliance Infrastructure reportedly plans to raise Rs 2500 crore as loan this fiscal and is in talks with banks including IDBI, Axis Bank and IIFCL for raising the funds.

India’s largest realty player by market capitalization DLF fell 3.38% to Rs 300.15. The company said on Tuesday, 14 October 2008, its share buyback for about Rs 1100 crore will open on Friday, 17 October 2008, after complying with regulatory requirements. The buyback of up to 2.2 crore shares at a maximum of Rs 600 each was set to open today, but was rescheduled following clarifications sought by the Securities and Exchange Board of India (Sebi).

Sanwaria Agro Oils rose 5.41%, as net profit jumped 56.02% to Rs 22.07 crore in Q2 September 2008 over Q2 September 2007.

Hindustan Construction Company plunged 11.7%, even after the company said that Bank of India has invested Rs 150 crore in its subsidiary Lavasa Corporation, in the form of convertible debentures.

Moser Baer India plunged 15.34%, even as the company said on Wednesday, 15 October 2008, it has set up a state-of-the-art digital video processing facility in Chennai, Tamil Nadu.

Koffee Break Pictures rose 2.7%, after the company said on Tuesday, 14 October 2008, its board will meet on 16 October 2008 to consider a 10-for-1 stock split.

New Delhi Television tumbled 17.34% after net loss rose to Rs 13.04 crore in Q2 September 2008, from Rs 3.95 crore in Q2 September 2007.

Honeywell Automation India surged 5.36% after the company reported 58.20% spurt in net profit to Rs 28.95 crore on 4.89% rise in net sales to Rs 238.21 crore in Q3 September 2008 over Q3 September 2007.

Gemini Communication fell 1.88%, after the company said on Tuesday, 14 October 2008, its board will meet on 22 October 2008 to consider buyback of equity shares.

JSW Steel plunged 11.22% on reports the company may cut product prices by end-October 2008 in line with a fall in metal prices globally.

Britannia Industries fell 3.08% on reports the Nusli Wadia Group will acquire the foreign joint venture firm Groupe Danone's entire stake in the company with a committed $200 million funding from ICICI Bank.

GMR Infrastructure declined 5.91%, after the company said on Tuesday, 14 October 2008, it has acquired 50% stake in InterGen N.V, a global power generation company, for $954 million.

Chettinad Cement Corporation gained 2.11%, after the company said its board will meet on 16 October 2008 to consider issue of equity shares on rights basis.

ICI India galloped 7.68%, after the company said on Wednesday, 15 October 2008, its board will meet on 23 October 2008 to consider buyback of equity shares at a price not exceeding Rs 575 a share.

Omaxe slipped 7.67% after credit rating firm Fitch downgraded the company's long-term debt rating also revised the outlook to negative from stable.

Core Projects & Infrastructure clocked the highest volume of 1.05 crore shares on BSE. Reliance Natural Resources (92.39 lakh shares), Cals Refineries (76.22 lakh shares), IFCI (58.2 lakh shares) and JAiprakash Associates (44.87 lakh shares) were the other volume toppers in that order.

Reliance Capital clocked the highest turnover of Rs 230.68 crore on BSE. Reliance Industries (Rs 217.84 crore), Larsen & Toubro (Rs 205.60 crore), ICICI Bank (Rs 147.92 crore) and State Bank of India (Rs 143.43 crore) were the other turnover toppers in that order.

European markets which opened after Indian market were trading lower. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down by between 2.17% to 3.27%.

Asian markets were trading lower today, 15 October 2008 on concern the massive bank rescue of global would come at a huge economic cost and do little to repair the damage already done by a 14-month credit crunch. China's Shanghai Composite, Hong Kong's Hang Seng, Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul Composite and Taiwan's Taiwan Weighted fell between 0.86% to 3.72%.

The partially convertible rupee was at 48.40 per dollar today 15 October 2008, compared with Tuesday's close of 48.04/06.