Sensex tanks 15% in five trading sessions on domestic, global economic worries

Bears ruled the roost on the boures as worries about a weakening domestic and world economy, political uncertainty due to ongoing state elections, a setback in Asian stocks, fall in US index futures and weak European shares, pulled the domestic bourses lower for the fifth day in a row. The BSE 30-share Sensex lost 353.81 points, or 3.81%. The barometer index fell below the psychological 9,000 mark. World stocks fell on prospects of a deep global recession.

Volatility was at the high, with the Sensex swinging 324.34 points, between the day's high and low. Finance Minister P Chidambaram's statement that the government will take steps to stimulate the economy provided only a temporary respite as a recovery from lower level in early trade from an initial slump following his comments, was short-lived with the Sensex tumbling 419.30 points in early afternoon trade.

Chidambaram today said the government will take steps to stimulate the domestic economy to compensate for the downside caused by the downturn in the world economy. He said the government may consider cutting excise duty on some items as a part of efforts to boost factory output. He, however, added that the country could miss its annual export target of $200 billion for this fiscal year as the slowdown in developed nations trims overseas demand.

The Reserve Bank of India is monitoring the economic situation and will take action at the right time, its governor, D Subbarao, said today after meeting Chidambaram and senior finance ministry officials.

India's economy is slowing down after growing at an annual rate of 9% or more in the past three years. The economic growth slumped to 7.9% in the April-June 2008 quarter from 9.2% in the same period last year. The Reserve Bank of India has downgraded its growth forecast to 7.5% to 8% for the current financial year. Some private sector economists expect an even lower rate of growth.

Political uncertainty is weighing on the bourses as assembly elections in five states have just begun. 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. The results of these five states are expected on 8 December 2008.

Japan's recession could last even longer than feared, the country's economy minister warned today, 18 November 2008. Japan slid into its first recession in seven years in the third quarter as the financial crisis curbed demand for Japanese exports, data on Monday, 17 November 2008 showed.

Citigroup Inc, the No. 2 US bank, on Monday said it would cut 15% of its global workforce or 52,000 jobs, far more than had been expected.

Trading in the US futures suggested Dow could slide 146 points at the opening bell. European shares extended losses on Tuesday, 18 November 2008, after concerns over the extent of a recession in major economies weighed on banks and commodity stocks. Key benchmark indices in France, Germany and UK were down by between 1.48% to 2.37%.

A sharp setback was witnessed in shares in China and Hong Kong. The Shanghai Composite index was down 6.31%, dragged down by the property sector. Hang Seng was down 4.54%, with shares of commodity-related companies suffering double-digit losses. Key benchmark indices in South Korea, Japan, Singapore, Taiwan were down by between 2.28% to 3.91%.

The BSE 30-share Sensex was down 353.81 points, or 3.81%, to 8,937.20. The Sensex fell 419.30 points at the day's low of 8,871.71 in early afternoon trade. At the day's high of 9,169.05 hit in mid-morning trade, the Sensex fell 94.96 points.

The S&P CNX Nifty fell 116.40 points, or 4.16%, to 2,683.15.

The BSE clocked a turnover of Rs 3,022 crore today as compared to a turnover of Rs 3,230.17 crore on 17 November 2008.

Fears of a global recession, slowdown in the domestic economy and selling by foreign funds have pulled the Sensex down 1,598.96 points or 15.17% in the last five trading sessions from 10,536.16 on 10 November 2008. The barometer index is down 11,349.79 points or 55.94% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 12,269.57 points or 57.85% below its all-time high of 21,206.77 struck on 10 January 2008.

Nifty November 2008 futures were near spot price at 2684, compared to the spot closing of 2683.15. Turnover in NSE's futures & options (F&O) segment surged to Rs 43,260.01 crore from Rs 41,086.89 crore on Monday, 17 November 2008.

The market breadth, indicating the overall health of the market, was weak. On BSE, 661 shares rose as compared with 1,831 that declined. 75 shares remained unchanged.

The BSE Mid-Cap index slipped 2.33% to 3,060.32 and the BSE Small-Cap index dipped 2.81% to 3,558.66. Nevertheless, both the indices outperformed the Sensex.

The BSE Teck index (down 4.96% to 1,934.79), the BSE IT index (down 4.7% to 2,447.76), the BSE Power index (down 4.67% to 1,571.98), the BSE Bankex (down 4.51% to 4,732.48), the BSE PSU index (down 4.42% to 4,532.08), the BSE Metal index (down 4.38% to 4,516.28) underperformed the Sensex.

The BSE Oil & Gas index (down 1.53% to 5,572.02), the BSE HealthCare index (down 1.55% to 2,831.60), the BSE Consumer Durables index (down 1.56% to 1,847.79), the BSE FMCG index (down 1.73% to 1,838.08), the BSE Auto index (down 2.28% to 2,336.50), the BSE Capital Goods index (down 3.52% to 6,626.50), the BSE Realty index (down 3.6% to 1,838.87), outperformed the Sensex.

Reliance Industries (RIL), India's largest private sector company by market capitalization and oil refiner, recovered from the day's low of Rs 1,092.50, falling 0.17% to Rs 1,140.70, on bargain hunting after a recent steep-slide. It was the lone gainer from the Sensex pack. From a recent high of Rs 1,303.05 on 10 November 2008, the stock fell 12.3% to Rs 1,142.65 on 17 November 2008.

Jaiprakash Associates (down 6.22% to Rs 67.90), Bharti Airtel (down 6.32% to Rs 623) and Tata Power Company (down 5.75% to Rs 682.70) were the major losers from the Sensex pack.

NTPC, India's biggest power generation firm by revenue, led 4.67% fall in BSE Power index. The stock lost 7.88%. Tata Power Company, Reliance Infrastructure, Reliance Power and Power Grid Corporation of India slipped by between 1.97% to 7.08%.

Metal stocks declined on worries global economic slowdown would hit demand. Hindalco Industries, Sterlite Industries, Tata Steel, Steel Authority of India, National aluminum Company fell by between 0.93% to 13.41%.

Tata Metaliks declined 4.87% after the company said it will shut one of its furnaces for repair work that will last three weeks.

IT stocks were down as fall in ADRs offset a weaker rupee. India's fourth largest IT exporter by sales Wipro lost 8.77% as ADR slipped 2.69%. India's second largest IT exporter by sales Infosys slipped 4.21%, as ADR fell 1.17%. India's third largest IT exporter by sales Satyam Computer Services fell 3.85% as ADR fell 0.91% on Monday, 17 November 2008. India's largest IT exporter by sales Tata Consultancy Services was fell 6.96%.

The Indian rupee was lower in afternoon trade on Tuesday as a further slide in the local share market continued to fuel expectations of further capital outflows. The partially convertible rupee was at 49.72/75 per dollar, off the day's low of 49.80 but still well below Monday's close of 49.34/36. Weak rupee augurs well for the sector as IT firms earn most of their revenues from US in dollar terms.

Realty stocks fell on reports India's top listed realty firm, DLF, has deferred some residential, commercial and hotel projects due to lower demand and a liquidity crunch. DLF, Unitech, Indiabulls Real Estate, Housing Development & Infrastructure, and Omaxe were down by 2.72% to 7.72%.

The Reserve Bank of India (RBI) had on Saturday (15 November 2008) announced fresh steps to free up liquidity for the troubled realty sector.

Auto stocks declined on worsening global economic outlook and declining domestic demand due to high interest rates and fuel prices. Maruti Suzuki India, Mahindra & Mahindra fell by between 1.25% to 6.74%. and Tata Motors rose by between 0.85% to 1.57%. But, India's largest motorbike maker by sales, Hero Honda Motors rose 0.06%.

Automotive Axles tumbled 10.36% on its decision to shut down manufacturing operations for at least a week in November-December 2008.

Banking stocks extended Monday's losses on reports ICICI Bank, India's India's largest private sector bank by net profit, has halved its target for growth in lending to 15% in a slowing economy. ICICI Bank fell 6.79%. India's second largest private sector bank by net profit HDFC Bank fell 1.77%. Its American depository receipt (ADR) slumped 1.62% on Monday. India's largest commercial bank State Bank of India (SBI) lost 5.12%.

Cement stocks slipped as slowdown in economy would result in fall in demand. ACC, Grasim Industries, Ultratech Cement, Birla Corporation, Ambuja Cements fell between 0.26% to 7.17%.

Swiss cement giant Holcim, which has stakes in Indian cement makers ACC and Ambuja Cements, may reportedly review the current capacity expansion projects in India amid a global slowdown and poor pricing situation.

Capital goods stocks declined on worries a slowing economy will crimp orders. Larsen & Toubro & Suzlon Energy slipped by between 3.41% to 7.08%. India's largest electric equipment maker by sales Bharat Heavy Electricals lost 2.06%, even as company today said it has received a contract worth Rs 1,325 crore ($265 million) for the supply of the plant package for a power project in Andhra Pradesh.

Sugar stocks slipped on reports the government and industry are at loggerheads over estimates of sugar production in the new season that began in October 2008, trend in prices and growth in exports. Bajaj Hindustan, Dhampur Sugar and Shree Renuka Sugars fell by between 0.32% to 2.46%.

Meanwhile, sugarcane farmers are up in arms against mills for the refusal to pay the state administered prices to them.

Indian largest oil exploration firm by revenues Oil & Natural Gas Corp slipped 4.64% as falling crude oil prices offset news of its wholly owned unit ONGC Videsh bagging two exploration blocks in Colombia.

US crude for December 2008 lost $2.09 at $54.95 on Monday, 17 November 2008, the lowest settlement since late January 2007 as worries about the economic outlook in the United States and Japan stoked concerns about global fuel demand.

Binani Industries tumbled 18.87% after the company cancelled a proposed share swap with two group companies.

Kalindee Rail Nirman Engineers galloped 20% after a block deal of 4.97 lakh shares, or 4.43% of the equity, was struck at Rs 115 on NSE.

Hardcastle & Waud Manufacturing Company was locked at 5% lower limit at Rs 210.65 at 13:02 IST on BSE, on closing down synthetic resins operations due to lack of orders.

Everest Kanto Cylinder rose 2.5%, after the company said it has deferred a buyback plan.

Pantaloon Retail India declined 2.99% on divesting its stake in an equal joint venture with British airport retailer Alpha Group Plc.

GVK Power & Infrastructure clocked the highest volume of 1.61 crore shares on BSE. Suzlon Energy (1.03 crore shares), Unitech (72.12 lakh shares), Steel Authority of India (66.22 lakh shares) and Reliance Natural Resources (63.49 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 345.98 crore on BSE. Reliance Capital (Rs 137.56 crore), State Bank of India (Rs 133.18 crore), ICICI Bank (Rs 120.23 crore) and Reliance Infrastructure (Rs 117.68 crore) were the other turnover toppers in that order.