Market extends losses for the third day in a row

Weak global markets and signs of further deterioration in the world economy weighed on the domestic bourses. The market extended losses for the third straight day. The BSE 30-share Sensex was down 118.03 points, or 1.22%.

Nevertheless, the market cut losses in late trade amid volatile trade ahead of the expiry of the December 2008 derivatives contracts. Bank stocks bucked the weak trend as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability.

After an initial slide triggered by weak global cues, the market recovered from lower level. However, the recovery proved short-lived. Intraday recovery was witnessed intermittently later. After weakening in mid-afternoon trade, the market recovered shortly. The market could not sustain the recovery and it weakened in late trade before bouncing back.

European shares fell on concerns about the weakening global economy. Key benchmark indices in France and UK were down by 0.58% to 0.77%. Stock markets in Germany, Finland, Switzerland, Sweden, Spain, Italy and Austria were closed for the Christmas holiday.

Asian stocks were mostly lower on signs of further deterioration in the world economy. In Japan, the Nikkei fell 2.37% as investors sold Toyota Motor Corp and auto-related stocks after the world's biggest automaker forecast its first-ever annual operating loss. Key benchmark indices in Hong Kong, China, South Korea were down by between 0.26% to 1.76%. The key benchmark indices in Taiwan & Singapore rose by 0.24% to 0.39%.

US stocks fell overnight on further deterioration in the housing market and worry over weak consumer spending. The Dow Jones slipped 100.28 points, or 1.18%, to 8,419.49. The S&P 500 index shed 8.47 points, or 0.97%, to 863.16. The Nasdaq composite index slipped 10.81 points, or 0.71%, to 1,521.54.

In more evidence of the deteriorating US housing market, data on Tuesday, 23 December 2008, showed the pace of existing home sales plunged a record 8.6% in November 2008 and new-home sales fell 2.9% last month. Another data on the same day showed, US gross domestic production fell 0.5% in July-September 2008 quarter.

A survey released on Tuesday showed just 38.7% of Americans went shopping during the final weekend before Christmas -- usually among the busiest shopping weekends of the year.

Data on Tuesday revealed that British gross domestic product fell 0.6% during the July-September 2008 quarter, faster than the previous estimate for a 0.5% contraction. British house prices will fall about 10 percent in 2009 with risks skewed to the downside, the Royal Institution of Chartered Surveyors said on Tuesday.

On the same day, Spain, Europe's fifth-largest economy, declared it had stumbled into recession and New Zealand data showed it was suffering its worst contraction in eight years.

The BSE 30-share Sensex was down 118.03 points, or 1.22%, to 9,568.72. At the day's low of 9,502.53, the Sensex fell 184.22 points in late trade. The Sensex fell 33.33 points at the day's high of 9,653.42 hit in mid-morning trade.

The S&P CNX Nifty was down 51.80 points, or 1.74%, to 2,916.85.

The BSE clocked a turnover of Rs 3,176 crore, lower than Rs 3,378.03 crore on 23 December 2008.

Nifty January 2009 futures were at 2943.50, at a premium of 26.65 points as compared to the spot closing of 2916.85. Turnover in NSE's futures & options (F&O) segment was at Rs 45,355.58 crore, lower than Rs 51,132.48 crore on Tuesday, 23 December 2008.

The BSE Mid-Cap index fell 0.95% and the BSE Small-Cap index declined 1.07%. Both the indices underperformed the Sensex.

The BSE Sensex has lost 531.19 points or 5.25% in last three trading sessions from a high of 10,099.91 on 19 December 2008. Before the fall, the market had risen sharply. From a recent low of 8,739.24 on 2 December 2008, the Sensex had jumped 1,360.67 points or 15.56% in nine trading sessions to 10,099.91 on 19 December 2008.

The barometer index is down 10,718.27 points or 52.83% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,638.05 points or 54.87% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE Realty index (down 4.91%), the BSE Auto index (down 2.38%), the BSE Teck index (down 2.28%), the BSE Metal index (down 1.87%), the BSE IT index (down 1.86%), the BSE Power index (down 1.51%), the BSE Oil & Gas index (down 1.46%), the BSE FMCG index (down 1.34%) underperformed the Sensex.

The BSE Bankex (up 1.64%), the BSE HealthCare index (down 0.18%), the BSE PSU index (down 0.66%), the BSE Consumer Durables index (down 0.83%), the BSE Capital Goods index (down 0.96%) outperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On BSE, 930 shares rose as compared with 1,535 that declined. 93 shares remained unchanged.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.5% to Rs 1,241.20 on concerns the recent sharp fall in crude prices will hit refining margins.

Oil exploration firm ONGC fell 2.66% as oil fell towards $38 a barrel on Wednesday on expectations that deepening global recession would reduce oil demand. U.S. light crude for February delivery fell 94 cents to a low of $38.04 a barrel.

PSU OMCs rose on reports the government would issue oil bonds worth Rs 22,000 crore to compensate them for selling fuel at state-set prices. BPCL, HPCL and Indian Oil Corporation rose by between 0.798% to 5.12%.

Metal stocks declined on worries a weakening domestic and global economy will hit demand. Steel Authority of India, Tata Steel, Hindalco Industries, National Aluminum Company, Sterlite Industries fell by between 1.85% to 5.34%.

Mahindra Ugine Steel Company slumped 4.67% after the company reduced the number of shifts and days of work on slowing demand for its products.

Auto stocks fell on concerns about the weakening domestic demand. Mahindra & Mahindra and Maruti Suzuki India fell by 2.08% to 4.07%.

India's largest commercial vehicle maker by sales Tata Motors fell 8.69% extending losses for the second straight day on reports the company may have to pump in at least $1 billion to revive premium British brands Jaguar and Land Rover that it bought earlier this year.

Real estate shares extended losses on recent reports property rates are expected to fall by 20-25% as demand has dropped off sharply over the past 9-10 months due to high interest rates. Indiabulls Real Estate, DLF and Unitech fell by between 2.62% to 12.29%. Fall in property prices is expected to hit the margins of developers already hit by the demand slowdown. Additionally, developers are facing a sever cash crunch that is hindering the execution of ongoing projects and grounding new launches.

Bank stocks rose as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability. India's largest commercial bank State Bank of India (SBI) rose 1.77%. On Saturday, 20 December 2008, SBI slashed its lending rate by 75 basis points, to be effective from 1 January 2009. The bank also cut its deposit rates by 25 to 100 basis points across maturities.

India's largest private sector bank by net profit ICICI Bank rose 3.27% even as its American depository receipts (ADR) slipped 6.52% on Tuesday. Its advance tax payment declined 6% to Rs 470 crore in Q3 December 2008 over Q3 December 2007. ICICI Bank said on Friday, 19 December 2008, joint managing director Chanda Kochhar would succeed Chief Executive K.V. Kamath who retires in April 2009. Kamath, chief executive since 1996, will become non-executive chairman from May 2009 replacing N. Vaghul who retires.

India's second largest private sector bank by net profit HDFC Bank gained 0.65% even as its American depository receipt (ADR) slipped 11.02% on Tuesday, 23 December 2008.

India's largest home loan lender by operating income Housing Development Finance Corporation (HDFC) fell 0.98%. It cut its retail lending rates by 50 basis points, effective 22 December 2008. HDFC announced the rate cut after trading hours on Friday, 19 December 2008.

IT stocks fell as rupee turned stronger during the course of the day. India's third largest IT exporter by sales Wipro fell 4.3% to Rs 232.40 off the day's high of Rs 254.80, even as the company said it is buying Citi Technology Services (CTS), the India-based captive provider of information technology services and solutions to Citi entities worldwide, for $127 million in an all cash deal. The company announced the acquisition after trading hours on Tuesday.

India's second largest IT exporter by sales Infosys fell 0.4%. Infosys sees the Indian IT industry going through a slow phase of growth for some time, its chief executive said last week. India's largest IT exporter by sales Tata Consultancy Services fell 4.47%.

After steep slide of 18.34% to a low of Rs 114.65 triggered by reports the World Bank has barred the company from conducting any business with it for eight years due to data theft and paying bribes to its staff, Satyam Computer, India's fourth largest IT major by sales, staged a solid rebound. The stock was down 3.88% to Rs 134.95. Volumes in the stock were a huge 4.03 crore on BSE. The World Bank has been an important client for Satyam. The multilateral agency had signed $100-million billing per annum contract. Satyam ADR fell 11.02% on Tuesday. The stock had plunged 18.34% at the day's low.

Satyam shares had tumbled 13.55% on Tuesday on rumours its founder and chairman Ramalinga Raju had resigned from the board. As per unconfirmed reports, Raju has put in his papers and he awaiting the company board's decision on the issue. The company had said on Thursday, 18 December 2008, said its board will meet on 29 December 2008 to consider buyback of shares, a move aimed at boosting investor confidence. The stock had slumped 30.22% to Rs 158.05 on Wednesday 17 December 2008 after it called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju, bowing to investor pressure.

The Indian rupee recovered from a two-week low in afternoon trade on Wednesday helped by exporter dollar sales after the unit slipped beyond the 49 per dollar mark earlier in the session. The partially convertible rupee was at 48.25/30 per dollar, off a low of 49.20 and stronger than its previous close of 48.78/81. A stronger rupee negatively impacts the operating margins of IT firms as they earn most of their revenues from exports.

Capital goods stocks slipped on worries a slowing economy will crimp orders. Larsen & Toubro, Thermax, and ABB fell by between 0.8% to 2.87%.

India's largest electric equipment maker by sales Bharat Heavy Electricals fell 0.9% even as it won two contracts worth Rs 2,100 crore from state-run utility NTPC.

Sugar stocks rose as sugar futures rose in the commodities market. Bajaj Hindustan, Balrampur Chini, Shree Renuka Sugars and Dhampur Sugar rose by 0.54% to 3.27%. The February contract NSMG9 on the National Commodity and Derivatives Exchange rose 0.41 % to 1,953 per 100 kilogram

Deep Industries jumped 6.98% after a consortium of the company was awarded a block under the New Exploration Licensing Policy.

Fortis Healthcare rose 2.37% after its board approved raising funds by way of issuing equity shares with warrants on rights basis.

Aurobindo Pharma surged 3.02% on receiving the Canadian regulatory approval to sell terbinafine hydrochloride tablets in multiple strengths.

ABG Infralogistics galloped 15.43% on BSE on reports a French firm will acquire a 49% stake in its bulk port handling business.

Era Infra Engineering rose 0.28% on bagging an order worth Rs 9.62 crore.

PBA Infrastructure jumped 4.58% on bagging two orders aggregating to Rs 47.96 crore.

Punj Lloyd was flat at Rs 151.55 on bagging an order worth Rs 303.95 crore.

Pyramid Saimira Theatre was frozen at 10% lower circuit at Rs 55.05 after the stock market regulator said it had not issued any letter regarding an open offer for the company's shares at a huge premium over the market price.

GEE gained 3/74% on setting record date for issuing bonus shares in the ratio of 1:5.

Satyam Computer Services clocked the highest volume of Rs 4.03 crore shares on BSE. Unitech (3.28 crore shares), Suzlon Energy (1.44 crore shares), Cals Refineries (1.34 crore shares) and Reliance Natural Resources (1.11 crore shares) were the other volume toppers in that order.

Satyam Computer Services clocked the highest turnover of Rs 510.82 crore on BSE. Reliance Capital (Rs 148.07 crore), Reliance Industries (Rs 143.46 crore), DLF (Rs 141.91 crore) and Educomp Solutions (Rs 138.64 crore) were the other turnover toppers in that order.