RIL, ICICI Bank lead 1.7% Sensex slide

Investors resorted to profit booking on weakness in global stocks pulling the barometer index BSE Sensex down 171.56 points, or 1.7%. The Sensex shed 244.99 points from the day's high. Index heavyweight Reliance Industries and ICICI Bank led the decline as the barometer index ended below the psychologically important 10,000 mark. Caution ahead of the expiry of the near month derivatives contracts weighed on the market.

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 near month December 2008 derivatives contracts will expire on Wednesday, 24 December 2008, as the markets are closed on Thursday, 25 December 2008, for Christmas.

Volatility was high right from the onset of the trading session. After an initial slide, the market firmed up in early trade on optimism from rate cut by India's biggest lender and on a likely second government stimulus package for the economy. It retreated shortly to reach the day's low in morning trade before bouncing back. The market moved between positive and negative zone later. The market surged to the day's high in afternoon trade. It soon cut the gains. The market weakened in mid-afternoon trade amid volatility. It extended losses. The market cut losses in late trade.

India's largest commercial bank State Bank of India (SBI) on Saturday, 20 December 2008, 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. SBI's rate cut raised expectations other banks would follow suit.

Lower interest rates and a likely second stimulus package for the economy may revive the economy. The Indian economy has slowed down after a strong growth in the past three years.

Global shares weakened on Monday, 22 December 2008, in tandem with the dollar, pressured by signs of a deepening recession in Japan and concerns about the banking sector around the world. Ireland's weekend announcement that it would take stakes in its three main banks for 5.5 billion euros further underlined the global scope of the worst financial crisis in 80 years. Trading in US index futures indicated the Dow could fall 32 points at the opening bell. In Europe, key benchmark indices in France, Germany and UK were down by between 1.08% to 1.77%.

Most Asian stock markets fell, led by material producers and finance companies, on increasing signs the deepening global recession is hurting corporate profits. Key benchmark indices in China, Taiwan, Singapore, Hong Kong and South Korea were down fell by between 0.12% to 3.39%. However, Japan bucked the weak trend in Asian markets after the government unveiled a $54 billion stimulus package for the economy. The Nikkei 225 average was up 1.57%.

Japanese exports plunged at a record annual pace of nearly 27% in November 2008, hit by the fall in global demand as well as the yen's 20 percent rise against the dollar this year, data on Monday showed. The Bank of Japan Governor Masaaki Shirakawa warned that economic conditions were becoming more severe as the United States was entering a recession that could be the longest since World War Two.

Meanwhile, China's central bank cut banks' benchmark lending and deposit rates by 0.27 percentage points today, 22 December 2008, the fifth cut since mid-September 2008. The announcement was made after trading hours in China.

Rating agency S&P on Friday, 19 December 2008, revised its outlook on Europe's largest bank, HSBC Holdings and some of its subsidiaries, to negative from stable, saying the lender's asset quality is likely to deteriorate.

Toyota Motor Corp, the world's biggest automaker, on Monday forecast its first ever group operating loss due to a relentless global slide in car sales and a crippling rise in the yen.

Falling commodities demand prompted Rio Tinto, the world's third-largest mining company, to suspend operations at its Hismelt pig iron plant in Western Australia.

The BSE 30-share Sensex was down 171.56 points, or 1.7%, to 9,928.35. At the day's low of 9,894.01, the Sensex fell 205.90 points in late trade. The Sensex rose 73.43 points at the day's high of 10,173.34 hit in afternoon trade.

The S&P CNX Nifty was down 38.20 points, or 1.24%, to 3,039.30.

The barometer index BSE Sensex is down 10,358.64 points or 51.06% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,278.42 points or 53.18% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE clocked a turnover of Rs 3,849 crore, much lower than Rs 5,066.77 crore on Friday, 19 December 2008.

The BSE Consumer Durables index (up 2.94%), the BSE FMCG index (up 0.19%), the BSE PSU index (up 0.14%), the BSE Realty index (up 0.13%), the BSE Teck index (down 0.51%), the BSE IT index (down 0.52%), the BSE Power index (down 0.75%),the BSE HealthCare index (down 0.86%), the BSE Capital Goods index (down 0.99%), the BSE Auto index (down 1.36%), the BSE Metal index (down 1.52%) outperformed the Sensex.

The BSE Oil & Gas index (down 3.02%), the BSE Bankex (up 2.38%) underperformed the Sensex.

The market breadth, indicating the overall health of the market, turned almost even in late trade from a strong breadth earlier in the day. On BSE, 1,276 shares rose as compared with 1,258 that declined. 82 shares remained unchanged.

ITC, Grasim Industries, Tata Power Company rose by between 0.35% to 0.87%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 5.06% to Rs 1,318.80 on reports it may face pressure from the US to stop selling gasoline to Iran. As per reports, eight American lawmakers have asked the Export-Import Bank of United States (Ex-Im US) to immediately suspend all financial assistance to Reliance Industries (RIL) till it agrees to stop selling gasoline to Iran.

In a letter written to Ex-Im Bank president James Lambright, the American lawmakers stated that RIL is a major supplier of gasoline to Iran which is detrimental to the national security interests of the US and the loan is in direct collision with its foreign policy on Iran.

India's largest oil exploration firm by revenue ONGC advanced 0.13% as crude oil rose on speculation the Organisation of Petroleum Exporting Countries (Opec) production cuts next month and US economic stimulus plans will reduce global stockpiles.

Cairn India gained 4.73% after it made an oil and gas discovery near its existing field in Rajasthan.

On the New York Mercantile Exchange, February 2008 contract gained $ 1.08, or 2.6% to $43.44 a barrel.

Metal stocks declined on worries a weakening domestic and global economy will hit demand. Steel Authority of India, Tata Steel, Hinalco Industries, Jindal Steel, Sterlite Industries fell by between 0.02% to 4.29%.

Capital goods stocks fell on worries a slowing economy will crimp orders. Larsen & Toubro and ABB fell by between 0.49% to 1.2%. India's largest electric equipment maker by sales Bharat Heavy Electricals fell 2.44% despite winning a contract worth Rs 1175 crore from Jaiprakash Power Ventures to set up a 500-megawatt thermal power plant in central India.

Banking stocks were mixed caught between concerns of fall in net interest margin (NIM) and hopes of surge in lending growth after cut in lending and borrowing rates by SBI. SBI fell 1.03% to Rs 1,274.35, off the day's high of Rs 1,322.

India's second largest private sector bank by net profit HDFC Bank fell 3.01% as its American depository receipt (ADR) fell 1.69% on Friday 19 December 2008.

India's largest private sector bank by net profit ICICI Bank fell 5.49% even as its American depository receipts (ADR) gained 1.3% on Friday, 19 December 2008. 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 largest home loan lender by operating income Housing Development Finance Corporation (HDFC) fell 1.78% after it cut its retail lending rates by 50 basis points, effective today, 22 December 2008. Rates on new home loans up to Rs 20 lakh will drop to 10.25%, while those on bigger loans will attract a rate of 11.25%, it said. HDFC announced the rate cut after trading hours on Friday, 19 December 2008.

Union Bank of India fell 2.17% after bank on 19 December 2008 cut its deposit rates across various maturities by 0.5-1.5%.

Bank of Baroda rose 2.18% after the bank cut benchmark prime lending rate (BPLR) by 75 bps to 12.5% deposit rates by 0.5-1% across all maturities with effect from 1 Jan 2009.

Other PSU banks, Bank of India, Canara Bank, Indian Overseas Bank rose by between 1.41% to 2.18%.

The latest rate cut by SBI and HDFC follows aggressive rate cuts by the Reserve Bank of India (RBI). The RBI on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

Outsourcing firms dropped in volatile trade as fears a weak global economy would cut the amount firms spent on technology offset a weaker rupee. India's fourth largest IT exporter by sales Wipro fell 0.92% to Rs 246.60. The stock moved between a low of Rs 240.15 and a high of Rs 253.30. India's second largest IT exporter by sales Infosys fell 0.4% to Rs 1,181.60. The stock moved between a low of Rs 1165.40 and a high of Rs 1,202.70. 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 0.56% to Rs 510.35. The stock moved between a low of Rs 503.30 and a high of Rs 518.90.

Satyam Computer Services fell 0.25% to Rs 162.40. The stock moved between a high of Rs 168.60 and a low of Rs 159.60. The company said on Thursday, 18 December 2008 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.

Northgate Technologies was locked at 5% upper limit after foreign fund Swiss Finance Corporation Mauritius hiked its stake to 6.43% in the company.

The Indian rupee eased on Monday as local shares flip-flopped on mixed cues from the world markets. The partially convertible rupee was at 47.33/34 per dollar, off an early low of 47.45, but still weaker than Friday's close of 47.25/26. A weaker rupee augurs well for IT firms which derive a lion's shares of revenue from exports.

Rate sensitive real estate shares were mixed on hopes lower rates will spur housing demand. DLF and Anant Raj Industries rose by between 1.08% to 2.73%. But Indiabulls Real Estate fell 4.79%. Home purchases by home buyers are largely through finance.

Unitech surged 3.39% on reports ITC, hotel chain Accor, and some high net worth individuals are in the race to acquire six hotel properties owned by the realty firm.

Auto stocks fell on concerns about a weakening domestic demand. Mahindra & Mahindra, Maruti Suzuki India, and Hero Honda Motors fell by between 2.32% to 4.55%.

But India's largest commercial vehicle maker by sales Tata Motors jumped 4.91% on reports it has agreed to inject tens of millions of pounds into Jaguar Land Rover, the luxury carmaker earlier it bought this year for $2.3 billion from Ford Motor Co, to prevent an immediate cash flow crisis.

India's largest drugmaker by sales Ranbaxy Laboratories rose 2.05% on reports it is planning to sell three of its manufacturing units in China, Vietnam and Malaysia as part of a strategy to rationalise its business portfolio and cut costs.

Fortis Healthcare spurted 4.87% after it scheduled a board meet on 24 December 2008, to consider raising funds by way of a rights issue.

Aurobindo Pharma galloped 9.43% on receiving nod to launch four drugs in South Africa.

Some infrastructure stocks rose on the government's thrust on the sector. Gammon India, Era Infra Engineering, Gayatri Projects, IVRCL Infrastructure & Projects rose by between 1.2% to 5.46%.

GMR Infrastructure gained 3.15% on increase in promoters' stake in the company.

The government hopes to precipitate infrastructure projects worth Rs 100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company, a specialist lender to the infrastructure sector. The government has allowed India Infrastructure Finance Company (IIFCL) to raise Rs 10,000 crore by issuing tax-free bonds.

IIFCL will use these funds to refinance bank lending of longer maturity to infrastructure projects, especially in highways and port sectors.

BGR Energy Systems soared 2.25% on signing a pact with an Italian firm for condensate polishing plants in India

Texmaco jumped 6.47% on setting record date for a 10-for-1 stock split.

Taj GVK Hotels & Resorts rose 4.89% after the company opened a new five star hotel at Chennai, Tamil Nadu.

Pyramid Saimira Theatre fell 9.95% after the stock market regulator ordered the promoter P.S. Saminathan to make open offer at a minimum price of Rs 250 a share, a 209.78% premium over the ruling market price

Unitech clocked the highest volume of 3.32 crore shares on BSE. Suzlon Energy (2.53 crore shares), Reliance Natural Resources (2.3 crore shares), Housing Development & Infrastructure (1.27 crore shares) and Reliance Petroleum (1.24 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 254.57 crore on BSE. DLF (Rs 217.62 crore), Reliance Capital (Rs 213.04 crore), Housing Development & Infrastructure (Rs 212.53 crore) and Unitech (Rs 158.45 crore) were the other turnover toppers in that order.