Sensex slumps nearly 6%

Investor sentiment remained jittery on political uncertainty ahead of state elections, uncertainty about a US Treasury plan to forgo buying bad mortgage-related investments to buy stakes in US lenders and caution ahead of a meeting of G20 political leaders. Fall in India's exports for the first time in five years also weighed on the investor sentiment,

The market failed to sustain the rally witnessed at the start of the week caused by China's massive economic stimulus plan. Higher-than-expected industrial production growth in September 2008 and expectation of further cut in interest rates triggered by fall of inflation to single digit, failed to avert the slide. The BSE Sensex fell in three out of the four trading sessions in the week.

The barometer index fell 578.87 points or 5.81% to 9,385.42 in the week ended Friday, 14 November 2008. The S&P CNX Nifty dipped 162.65 points or 5.47% to 2,810.35 in the week.

The BSE Mid-Cap slipped 139.30 points or 4.15% to 3,216.08 and the BSE Small-Cap index lost 135.05 points or 3.46% to 3,766.05. Both the indices outperformed the Sensex.

The barometer index BSE Sensex is down 10,901.57 points or 53.73% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,821.35 points or 55.74% below its all-time high of 21,206.77 struck on 10 January 2008.

Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. FII outflow reached Rs 51,047.40 crore in calendar 2008, so far, till 12 November 2008.

Trading for the week began on a firm note as unabated buying in blue chips throughout the day triggered a solid rally after China's massive economic stimulus plan raised expectations that authorities elsewhere would follow suit. The BSE Sensex surged 571.87 points or 5.74%, to close at 10,536.16 on Monday, 10 November 2008. Reduction in India's economic growth forecast by global investment banking and securities firm Goldman Sachs failed to put brakes on the rally.

Key benchmark indices underperformed its global peers on Tuesday, 11 November 2008, as fall in India's exports for the first time in five years in October 2008 and worries about the global economy eclipsed optimism over China's massive $600 billion economic stimulus package. The BSE 30-share Sensex slumped 696.47 points or 6.61% to 9,839.69, in a highly volatile trade.

Key benchmark indices slumped in volatile trade on Wednesday, 12 November 2008, extending the previous day's steep losses on political uncertainty ahead of the beginning of assembly polls in five states. The BSE 30-share Sensex was down 303.36 points or 3.08% to 9,536.33

Political uncertainty ahead of state elections, uncertainty about a US Treasury plan to forgo buying bad mortgage-related investments to buy stakes in US lenders and caution ahead of a meeting of G20 political leaders, pulled the market lower in what was a choppy trading session on Friday, 14 November 2008. The BSE 30-share Sensex was down 150.91 points or 1.58% at 9,385.42.

India's largest private sector firm by market capitalization and oil refiner Reliance Industries slumped 5.69% to Rs 1,148.55 in the week. As per reports on 11 November 2008, the company is unlikely to meet its previously-announced commissioning schedules for two key oil and gas projects, as depressed global fuel demand, the financial market turmoil and legal challenges to its plans force it to push back deadlines.

India's largest oil exploration firm by revenue ONGC slipped 6.48% to Rs 693.55. On Wednesday, 12 November 2008, chairman R.S. Sharma said that company will lose Rs 300 crore-Rs 400 crore annually if it followed a finance ministry directive to keep 60% of its surplus cash with state-run banks.

India's second largest IT exporter by sales, Infosys Technologies fell 3.53% to Rs 1217.90 in the week. Britain's BT Group, one of its major clients, announced cost cutting measures. On Thursday (13 November 2008), the BT group announced 10,000 job cuts and a plan to trim the cost of its pension scheme just as it posted better-than-expected second-quarter earnings and revenues.

India's second largest telecom services provider by sales Reliance Communications declined 3.68% to Rs 219.75 in the week. As per repots on 14 November 2008, the company is considering bidding for Iran's third mobile phone service license. Reliance Communications (RCom) will compete with firms from Russia, Turkey and Malaysia for the tender for which Iran will calls bids shortly, reports suggest.

Shrugging off the global financial sector crisis, GSM-based cellular services providers added a record 7.7 million mobile users in October 2008. Total GSM mobile users at the end of October 2008 stood at 241.4 million, up 3.3% from 233.7 million in September 2008.

India's largest engineering and construction firm by sales Larsen & Toubro slumped 9.12% to Rs 791.50. The company's consortium on 10 November 2008 bagged a large order worth Rs 2,460 crore.

ICICI Bank (down 8.19% to Rs 395.95), HDFC Bank (down 7.17% to Rs 1,011.60), State Bank of India (down 6.34% to Rs 1,170.10), Satyam Computer Services (down 5.8% to Rs 261.65), Wipro (down 7.51% to Rs 240.90), edged lower from the Sensex pack.

India's second largest steel producer by sales Steel Authority of India lost 18.59% to Rs 68.75. As per reports on 14 November 2008 the company may miss the 2010-deadline to complete its expansion and modernisation programme to enhance production capacity from 15 million tonne to over 26 million tonne with an investment of Rs 54,000 crore.

India's second largest steel producer by sales Steel Authority of India lost 18.59% to Rs 68.75. As per reports on 14 November 2008 the company may miss the 2010-deadline to complete its expansion and modernisation programme to enhance production capacity from 15 million tonne to over 26 million tonne with an investment of Rs 54,000 crore.

Inflation, as measured by the wholesale price index, declined sharply to 8.98% in the week ended 1 November 2008 from 10.72% in the previous week mainly due to sharp drop in oil prices

Industrial production rose 4.8% in September 2008 much higher than a revised 1.4% growth in August 2008 government announced on Wednesday, 12 November 2008. The cumulative increase in industrial production during April-September 2008 period was 4.9% as against 9.5%, during the corresponding period last year.

The government may consider cutting fuel prices if global crude prices and the rupee stabilise, the oil minister, Murli Deora, on, 12 November 2008, said.

India's excise duty collections fell by 8.7% to Rs 9399 crore in October 2008. Customs duty collections also eased by 0.9% to 9265 crore during this period. As a result, the total customs and excise duty collections fell by 5% to Rs 18664 crore in October 2008.

Goldman Sachs on 10 November 2008, cut forecast on India's GDP growth for the year ending March 2009 (FY 2009) to 6.7% from 7.5% due to the knock-on effects of the global financial crisis. It also cut its growth projection for the year ending March 2010 (FY 2010) to 5.8% from 7% on concerns negative global financial stocks will continue to slow activities across the board.

According to the figures released by the Society of Indian Automobile Manufacturers (Siam), passenger car sales declined 6.6% to 98,900 units in October 2008 over October 2007. Sales of trucks and buses fell 35.9% to 28,027 units.

Power Secretary Anil Razdan on 10 November 2008, said the government has deferred bidding for the 4,000 megawatt power plant at Tilaiya in eastern India by a month because of the credit crisis. Nine companies had qualified to bid for the project and six to seven of them, including the Tata group, had requested the government to postpone the bidding.

Polling for assembly elections in Chhattisgarh began on Friday, 14 November 2008. Chhattisgarh is the first state out of a total of five states in which polling is being held for assembly elections. These polls are widely seen as a test of the popularity of the country's main political parties viz. the Congress and the BJP, ahead of national elections in the first half of calendar year 2009.