Market slides for third straight week on global cues

Key benchmark indices finished lower for the third straight week on negative global cues and subdued Q3 corporate earnings. Market slipped in three out of five trading sessions. Despite the fall, the BSE Mid-Cap and Small-Cap indices outperformed the Sensex.

Turnover was muted as investors were reluctant to build positions in a truncated week. Market will remain closed on Monday (26 January 2009) for Republic Day holiday. The mood was cautious ahead of the Reserve Bank of India policy review on Tuesday (27 January 2009) and expiry of monthly derivatives contracts next week.

Results from India Inc were mixed in nature. As the undertone remained negative, even some strong results failed to trigger any significant buying during the week. So far, aggregate results of 497 companies showed a 24.1% decline in net profit on a 19.6% increase in net sales in Q3 December 2008 over Q3 December 2007.

A marginal rise in inflation also weakened hopes for further rate cuts by the central bank. Wholesale price index rose 5.6% in the 12 months to 10 January 2009, above the previous week's annual rise of 5.24%, government data released on 22 January 2009, showed . The inflation rate was 4.36% during the corresponding week the previous year.

FII outflow in January 2009 totaled Rs 3710.50 crore (till 21 January 2009). FIIs had pulled out a massive Rs 52,998.70 crore in calendar year 2008, as against an inflow of a huge Rs 71,486.50 crore in calendar year 2007.

The BSE 30-share Sensex fell 649.24 points or 6.96% to 8,674.35 in the week ended 19 January 2009. The S&P CNX Nifty fell 149.9 points or 5.29% at 2678.55in the week.

The BSE Mid-Cap index fell 176.64 points or 5.84% to 2,850.19 and the BSE Small-Cap index fell 157.23 points or 4.61% to 3,255.54 in the week.

The barometer index BSE Sensex is 12532.42 points or 59.09% below its all-time high of 21,206.77 struck on 10 January 2008.

After opening on positive note on firm Asian stocks, the Indian market gyrated between the positive and negative zone on 19 January 2009. On that day, The BSE 30-share Sensex was up 5.98 points, or 0.06%, to 9,329.57. The S&P CNX Nifty rose 17.75 points, or 0.63%, to 2,846.20.

Fears that the global financial sector crisis would trigger more foreign fund outflows pulled the market lower on 20 January 2009. Record loses at British bank Royal Bank of Scotland helped revive concerns about the global banking sector. The BSE 30-share Sensex was down 229.02 points, or 2.45%, to 9,100.55. The S&P CNX Nifty fell 49.60 points, or 1.74%, to 2,796.60.

A sell-off in late trade pulled key benchmark indices to day's low in what was a global equities rout on 21 January 2009. Fresh worries the global banking crisis may last longer than expected rattled bourses across the globe. US president Barrack Obama's inaugural speech overnight failed to lift sentiments as investors appetite for risky equities waned. The BSE 30-share Sensex was down 321.38 points, or 3.53%, to 8,779.17. The S&P CNX Nifty fell 90.45 points, or 3.23%, to 2,706.15.

Key benchmark indices logged small gains on positive global cues in what was a highly choppy trading session. Stocks oscillated wildly reacting to inflation data, corporate results and global cues on 22 January 2009. The BSE 30-share Sensex rose 34.67 points, or 0.39%, to 8,813.84. The S&P CNX Nifty rose 7.65 points, or 0.28%, to 2,713.80.

Equities ended sharply lower on 23 January 2009 weighed by dismal global cues with European shares sliding to a six-year low, subdued Asian equities and an overnight decline in US indices. Economic news from the UK were also disappointing. UK's 2008 GDP growth has been 0.7%, lowest since 1992, confirming the country is in recession. The 30-share BSE Sensex closed down 139.49 points or 1.58% at 8,674.35, down. The 50-unit S&P Nifty ended at 2678.55, down 35.25 points or 1.30.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slipped 5.36% in the week. The company after market hours on Thursday, 22 January 2009 announced a lesser than expected 8.8% fall in net profit to Rs 3501.crore in Q3 December 2008 over Q3 December 2007. RIL's net profit dipped for the first time in three years, but beat forecasts as refining margins did not fall as much as expected.

RIL earned $10 on every barrel of crude oil processed at its 660,000 barrel-a-day plant at Jamnagar in Gujarat, higher than other refineries in South Asia.

India's largest dedicated housing finance company by total income HDFC fell 11.31%. HDFC, during market hours on 21 January 2009 said its net profit fell 15.73% to Rs 546.83 crore in Q3 December 2008 over Q3 December 2007.

India's largest private sector bank by net profit ICICI Bank lost 14.07% to Rs 364.30. The BSE Bankex fell 10.98% in the week.

Realty stocks fell on reports falling interest rates have failed to revive housing demand. DLF (down 17.52%), Indiabulls Real Estate (down 16.12%), Omaxe (down 3.53%), slipped.

India's second largest realtor by market capitalisation Unitech fell 10.47% on reports it will postpone the sale of its Gurgaon-based hotel, The Courtyard, as the real estate firm had received undervalued quotations from various suitors.

TCS, India's largest software services exporter by sales fell 3.43% on reports it expects to slow its rate of hiring new staff this year, as a broad economic downturn affects its global clientele. TCS had reported a lower-than-expected rise in net profit in Q3 December 2008 with the management cautioning about the tough business environment at the time of declaring results after market hours on Thursday, 15 January 2008.

India's fraud-scarred outsourcing firm Satyam Computer Services surged 58.90% this week on reports the company is looking at roping in a strategic investor and iGate was eyeing part stake.

India's largest drugmaker by sales Ranbaxy Laboratories fell 13.83%. The company, after the market hours on 22 January 2009, reported a net loss of Rs 806.55 crore in Q4 December 2008 compared to a net profit of Rs 48.4 crore in Q4 December 2007. The net loss was for the second consecutive quarter and also for 2008, hit by forex and hedging losses, and problems in the US market.

The Planning Commission told industry not to expect any more stimulus packages from government during this financial year, ending March 2009. Enough has been done for the industry, the Planning Commission deputy chairman, Mr Montek Singh Ahluwalia said on 21 January 2009.

The government has already announced two stimulus packages to give a boost to the economy, reeling under the impact of the global slowdown. The government and the Reserve Bank were working in close coordination on steps to stimulate the economy, he noted.