Sensex swings 559 points in highly volatile trade

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. The BSE 30-share Sensex was down 150.91 points or 1.58%, despite expectations of further cut in interest rates triggered by inflation falling to double-digit level.

Selling by foreign funds pulled the market down. Foreign institutional investors (FIIs) dumped stocks worth a net Rs 811.52 crore today, 14 November 2008, provisional data released by the stock exchanges after trading hours showed. Domestic funds sold shares worth a net Rs 15.15 crore.

Volatility was high with Sensex swinging 558.76 points in the day, moving between positive and negative zone. Volatility in US index futures caused volatility on the domestic bourses. Trading in US index futures indicated the Dow could slide 109 points at the opening bell. Earlier, there was an intraday recovery in US index futures from an initial fall.

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.

Meanwhile, softening inflation will enable the Reserve Bank of India (RBI) to further cut interest rates to create more liquidity in a slowing economy. Lower interest rates boost stocks as they help rise in corporate bottomline by way of lower borrowing costs. RBI has already signaled an easier rate regime and cut a key short term rate earlier this month along with cuts in bank reserve ratios to free up funds for lending.

European shares raced higher in today, 14 November 2008, snapping a three-day losing streak, as mining shares tracked higher metals prices and banks advanced after recent declines. Key benchmark indices in UK, Germany and France were up by between 2.20% and 3.26%.

But Asian stocks pared strong early gains triggered by overnight surge in US stocks. Key benchmark indices in China, Hong Kong, Japan, Singapore, and Taiwan were up by between 0.21% and 3.05%. However, South Korea's Seoul Composite was down 0.02%

A two-day meeting of G20 political leaders begins in Washington later in the day to discuss ways to protect the global economy from a repeat of the worst financial crisis in 80 years.

US stocks rallied on Thursday, 13 November 2008 after the S&P 500 and the Nasdaq touched new multiyear lows earlier in the session as bargain hunters scooped up beaten-down shares. The Dow Jones industrial average jumped 552.59 points, or 6.67%, to 8,835.25, Standard & Poor's 500 Index shot up 58.97 points, or 6.92%, to 911.27 and Nasdaq Composite index surged 97.49 points, or 6.5% to 1,596.70.

US Treasury Secretary Henry M. Paulson said on Wednesday, 12 November 2008, his department was ditching its plan to purchase troubled assets from banks -- the centerpiece of the government's original $700-billion bailout plan -- in favor of injecting capital directly into financial institutions. Although investors had welcomed the capital infusions, they were disappointed that the government would not be taking billions of dollars in toxic assets off bank balance sheets.

The BSE 30-share Sensex was down 150.91 points or 1.58% at 9,385.42. At the day's high of 9,826.25 hit in early trade, the Sensex gained 284.92 points. The Sensex lost 268.84 points at the day's low of 9,267.49 in afternoon trade.

The S&P CNX Nifty lost 38.10 points or 1.34% to 2810.35. Nifty November 2008 futures were at 2829, a premium of 18.65 as compared to spot closing. Turnover in F&O segment slipped to Rs 41483.17 crore from Rs 49617.63 crore on Wednesday, 12 November 2008.

The market declined for a third day in a row today, 14 November 2008. The BSE Sensex has declined 1150.74 points or 10.92% in the last three trading sessions from 10536.16 on 10 November 2008. The barometer index is down 10901.57 points or 53.73% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11821.35 points or 55.74% below its all-time high of 21,206.77 struck on 10 January 2008.

The market breadth, indicating the overall health of the market, was negative with 1587 shares declining on BSE as compared to 936 that rose. A total of 78 shares remained unchanged.

The BSE Mid-cap index lost 1.99% to 3,216.08, underperforming the Sensex. The BSE small-cap index fell 1.27% to 3,765.05, outperforming the Sensex.

The total turnover on the BSE amounted to Rs 3674 crore as compared to Rs 3,690.41 crore on Wednesday, 12 November 2008.

All sectoral indices on BSE barring the BSE FMCG index, ended lower. The BSE FMCG, the BSE TecK index, the Bankex, the BSE Oil & Gas index, the BSE Healthcare and the BSE PSU index, outperformed the Sensex. The BSE Realty index, the BSE IT index, the BSE Power index, the BSE Consumer Durables, the BSE Metal, BSE auto and the BSE Capital goods underperformed the Sensex.

Among the 30-member Sensex pack, 20 slipped while the rest gained. ACC (down 8.83% to Rs 419.15), HDFC (down 4.75% to Rs 1560), and Jaiprakash Associates (down 5.06% to Rs 73.20), edged lower from the Sensex pack.

Ranbaxy (up 0.26% to Rs 215), and Tata Power (up 2.51% to Rs 750), edged higher from the Sensex pack.

Auto shares were under pressure on concerns economic downturn may impact sales. India's top truck maker by sales Tata Motors slumped 8.95% to Rs 136.25 on reports the company's Lucknow plant which produces heavy commercial vehicles is likely to be shut for another week.

Mahindra & Mahindra (down 0.65% to Rs 340), and Maruti Suzuki India (down 3.55% to Rs 540), were the other losers from the auto pack. The BSE Auto index fell 4.04%, to 2,439.61.

India's largest private sector company by market capitalization and oil refiner, Reliance Industries (RIL), slipped 0.78% to Rs 1153.10 on high volumes of 40.52 lakh shares on concerns of weakening refining margins amid sluggish demand for petroleum products. The stock swung wildly in range of Rs 1088.65 and Rs 1208.

Metal shares slipped despite firm metal prices on the London Metal Exchange (LME). Sterlite Industries (down 3.02% to Rs 229.90), JSW Steel (down 6.02% to Rs 275), Hindustan Zinc (down 3.05% to Rs 365), and Tata Steel (down 5.67% to Rs 174.60), slipped. India's top private sector aluminium maker by sales Hindalco Industries ended unchanged at Rs 56.55. The BSE Metal index slipped 3.34% to 4,873.40.

Steel Authority of India fell 2.85% to Rs 69.80 on reports the company may miss the 2010-deadline to complete its ambitious 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.

Capital goods shares dropped on worries a slowing economy would crimp orders. The country's largest power equipment maker by sales, Bharat Heavy Electricals, lost 4.88% to Rs 1271.80. India's top engineering and construction firm L&T by sales slipped 5.03% to Rs 786. The BSE Capital Goods index slumped 4.22% to 6,951.32, and was the worst hit among BSE sectoral indices.

IT pivotals declined after Intel, the world's biggest maker of PC microprocessors with 80% of the global market, announced a sharp cut in its fourth-quarter guidance, offering further evidence that technology companies are headed for bad times. The BSE IT index slipped 2.47% to 2,567.87.

India's top software services exporter Infosys lost 3.26% to Rs 1218.15 after foreign brokerage house CLSA said the company might miss its revenue guidance in dollar terms for the December 2008 quarter on a worsening global financial crisis.

Satyam Computer Services (down 0.96% to Rs 262.25), and Wirpo (down 2.65% to Rs 241), slipped. However India's top software services exporter Tata Consultancy Services rose 0.08% to Rs 532, off day's low of Rs 523.25.

The Santa Clara-based Intel Corp slashed more than $1 billion from its sales forecast and dialed its profit expectations way back. Intel blamed a clampdown on spending for reducing demand for its chips. Intel's announcement came after trading hours in India on Wednesday, 12 November 2008.

Tech Mahindra declined 5.32% to Rs 297.85 after its key customer, the UK-based BT Group, announced it would cut 6% of its workforce by March 2009.

Realty shares declined on concerns the global credit crunch will lead to a shortage of funds and thereby impact profitability. Unitech (down 6.33% to Rs 45.90), DLF (down 1.27% to Rs 241.50) and Indiabulls Real Estate (down 3.73% to Rs 108.40), dropped. The BSE Realty index lost 1.72% to 2,011.53.

Telecom pivotals advanced reversing last two days' losses after Japan's NTT DoCoMo on Wednesday, 12 November 2008, signed an agreement to acquire a 26% stake in unlisted Tata Teleservices (TTL). India's top mobile operator by market capitalisation, Bharti Airtel rose 3.92% to Rs 656 on 8.97 lakh shares and was the top gainer from the Sensex pack.

India's second largest cellular services provider by market capitalisation Reliance Communications gained 3.28% to Rs 223. The deal between NTT DoCoMo and unlisted TTL announced the deal after trading hours on Wednesday, 12 November 2008.

Tata Teleservices Maharashtra (TTML), jumped 12.84% to Rs 20.30 after NTT DoCoMo and Tata Sons announced a 20% open offer for the shareholders of Tata Teleservices Maharashtra (TTML) at Rs 24.70 a share. Tata Sons, the holding company of the Tata Group, holds 20.7% of the capital of TTML. The unlisted TTL owns 37.65% stake of TTML.

Telecom pivotals had succumbed to selling pressure in the past two days on reports new telecom companies planning to enter the Indian market to offer 3G services may have to pay 3% of their aggregate revenues to the government.

Defensive buying helped the BSE FMCG index record 0.07% rise to 1,906.68, in an otherwise weak market. Hindustan Unilever (up 0.51% to Rs 235.85), ITC (up 0.50% to Rs 170.90), and Dabur India (up 0.88% to Rs 86), rose.

Jyothy Laboratories surged 5.53% to Rs 248 on setting 19 December 2008 as the record date for a 5-for-1 stock split.

Banking shares were mixed amid expectations that lower interest rates will boost lending growth. HDFC Bank (down 0.29% to Rs 1005), and ICICI Bank (down 0.98% to Rs 394) slipped. However India's top state-run bank in terms of net profit State Bank of India gained 0.38% to Rs 1180, recovering from an intra-day low of Rs 1156. The Bankex was down 0.62% at 5,155.76.

Bank of India (up 1.67% to Rs 277.50), Punjab National Bank (up 1.43% to Rs 471) and Union Bank of India (up 1.21% to Rs 159), rose

Inflation, as measured by the wholesale price index, declined sharply to 8.98% in the week ending 1 November 2008 from 10.72% in the previous week mainly due to sharp drop in oil prices. The government unveiled the inflation data on Thursday, 13 November 2008, when the stock market was closed for a public holiday.

Reliance Industries was the top traded counter on BSE with turnover of Rs 462.30 crore followed by Reliance Capital (Rs 178.80 crore), State Bank of India (Rs 163 crore), ICICI Bank (Rs 139.45 crore) and Reliance Communications (Rs 124.50 crore).

GVK Power & Infrastructure led the volume toppers clocking volumes of 2.10 crore shares followed by Suzlon Energy (1.67 crore shares), Tata Teleservices (Maharashtra) (1.65 crore shares), Cals Refineries (95.50 lakh shares) and Reliance Natural Resources (79.40 lakh shares).

Lupin tumbled 5.20% to Rs 577 after the US Food and Drug Aministration found 15 manufacturing deficiencies at the company's Madhya Pradesh plant. The company made the announcement before market hours today, 14 November 2008.

CESC jumped 4.76% to Rs 227.90 after a report suggested that the company's Rs 2500-crore retail expansion plan till 2010 was intact and it would have 750 Spencer's Retail stores by then. The unlisted Spencer's Retail is a unit of CESC.

GMR Infrastructure declined 5.79% to Rs 62.60 on reports the company has backed out of its $155-million acquisition of 50% stake in Homeland Mining & Energy, a coal mining firm in South Africa.