Sensex falls below 11,000 on profit taking

A broad-based decline dragged the barometer index BSE Sensex below the psychological 11000 mark as a much awaited correction set in. The market breadth turned negative in contrast to a strong breadth seen in past few sessions. Both BSE mid-cap and small-cap indices slipped into the red after eight consecutive days of gains.

Realty shares, which held firm for most part of the day, crumbled like pack of cards in the last one hour of trade. All the sectoral indices on BSE, barring the FMCG index, were in the red. The BSE 30-share Sensex lost 337.33 points or 2.99%.

Political uncertainty weighed on the market as the the month-long parliamentary elections began today, 16 April 2009. Poll estimates point a fractured mandate.

The market was extremely volatile. After opening on a firm note taking cue from higher Asian stocks and overnight rally in US stocks, the market soon lost ground as IT and oil & gas shares declined. A recovery was witnessed after the Sensex slipped into the negative zone in early trade. However, the recovery proved short-lived and the Sensex once again slipped into the red.

Data showing a record low inflation triggered a short-lived recovery from lower level in afternoon trade. A sell-off once again gripped the bourses in afternoon trade. The market cut losses in mid-afternoon trade on expectations of a further easing of the monetary policy. However, sell-off once again gripped the market in late trade.

Inflation measured by the wholesale price index (WPI) rose 0.18% in the 12 months to 4 April 2009, below the previous week's annual rise of 0.26%, government data released by the government today, 16 April 2009 showed. It was the lowest growth in WPI inflation in at least two decades. Record low inflation has raised expectations of a further easing of the monetary policy by the Reserve bank of India (RBI). The central bank's next monetary policy review is on 21 April 2009.

Signs of an improvement in the Indian economy and easing of the credit crisis triggered a solid rally on the Indian bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3124.33 points or 36.92% to 11,284.73 on 15 April 2009, its highest closing since 14 October 2008.

Trading in US index futures showed the Dow could fall 29 points at the opening bell on Thursday, 16 April 2009.

European markets came off the lower level but trade was choppy. Key benchmark indices in UK, France and Germany were up by 0.74% to 1.17%.

Shares of the the world's largest maker of mobile phones Nokia Corp rose after it reported Q1 results which were in line with market expectations. Meanwhile, JPMorgan Chase reported a better-than-expected profit of $2.1 billion in Q1 March 2009 even as the bank aggressively set aside money to cope with rising loan losses.

In the euro zone, consumer prices grew at a record low of 0.6% in March 2009 while industrial production in February 2009 tumbled, the latest data showed.

Asian stocks ended on a mixed note. Key benchmark indices in Japan, South Korea, and Taiwan were up by 0.14% to 2.08%, on growing optimism that stimulus efforts and record-low interest rates are easing the global recession.

But stocks declined in China and Hong Kong after a government report showed the Chinese economy grew at the slowest pace in almost 10 years. China's Shanghai Composite index was down 0.08%. Hong Kong's Hang Seng was down 0.55%. Singapore's Straits Times index was down 0.75%

China's Gross domestic product (GDP) expanded 6.1% in Q1 arch 2009, after expanding 6.8% in Q4 December 2008. Expectations were a for a 6% expansion in gross domestic product for the period

The Chinese government said Thursday that recent economic data showed positive changes with better performance than expected. A spokesman for the National Bureau of Statistics in a statement Thursday cited improvement in agriculture and a steady increase in industrial production, despite falling profits. However, the bureau also warned that problems remain, including a fall in demand for Chinese exports, reduced government revenue and increased difficulties on employment.

US stocks surged on Wednesday, 15 April 2009, after the Federal Reserve's Beige Book survey showed the US slowdown is moderating and after credit card provider American Express Co. said bad loans increased at a slower pace in March 2009.

The BSE 30-share Sensex fell 337.33 points or 2.99% to 10,947.40. At the day's low of 10,900.47, the Sensex fell 384.26 points in late trade. At the day's high of 11,367.23, the Sensex rose 82.5 points at the onset of trading session, its highest level since 14 October 2008.

The S&P CNX Nifty was down 114.65 points or 3.29% at 3369.50. It slipped below its crucial 200 daily moving average (DMA) of 3450. Nifty April 2009 futures were at 3373.70, a premium of 4.2 points compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 78509.17 crore higher than Rs 72224.45 crore on Tuesday, 15 April 2009.

The BSE Mid-Cap index fell 4.53% and the BSE Small-Cap index was down 4.72%. Both the indices underperformed the Sensex.

The BSE FMCG index (up 1.92%), the BSE Healthcare index (down 1.76%), the BSE IT index (down 2.16%), and the BSE Auto index (down 2.63%), outperformed the Sensex.

The BSE Bankex (down 3.11%), the BSE PSU index (down 3.24%), the BSE Consumer Durables index (down 4.07%), the BSE Power index (down 4.38%), the BSE Oil & Gas index (down 4.50%), the BSE Capital Goods index (down 4.95%), the BSE Metal index (down 6.97%), and the BSE Realty index (down 9.16%), underperformed the Sensex.

The market breadth was weak. On BSE, 851 shares rose as compared to 1742 that declined. A total of 60 shares were unchanged. The breadth was strong in early trade.

India's largest truck maker by sales Tata Motors tumbled 13.50% on profit selling after it rose 56.35% in six consecutive sessions to Rs 281.20 on 15 April 2009 from Rs 179.85 on 1 April 2009.

India's top passenger vehicle maker by sales Maruti Suzuki rose 0.45% to Rs 851.55 on hopes lower interest rates will boost demand for passenger cars. The stock hit intraday high Rs 873, its 52-week high.

India's largest realtor by market capitalisation DLF slumped 11.62%. The company is reported to have approached the government to surrender four IT-ITeS notified special economic zones due to a cash crunch.

Unitech (down 9.78%), HDIL (down 14.71%), Omaxe (down 11.09%), Sobha Developers (down 9.41%), and Indiabulls Real Estate (down 9.02%), were the other real estate shares that fell sharply.

World's sixth largest steel maker by sales Tata Steel fell 8.25% on profit selling after the stock rose 49.55% in eight consecutive sessions to Rs 293.35 on 15 April 2009 from Rs 196.15 on 30 March 2009.

Stainless steel maker JSL slipped 9.11% on reports the company would post its first ever annual loss in the upcoming year ended results on high raw material prices and longer-than-expected plant shutdowns.

Jindal Saw (down 11.96%), JSW Steel (down 10.05%), Gujarat NRE Coke (down 9.82%), NMDC (down 9.12%), Welspun Gujarat Stahl Rohren (down 8.82%), Sesa Goa (down 8.09%), Hindalco Industries (down 6.84%), were the other major metal sector losers.

India's largest drug maker by sales Ranbaxy Laboratories fell 6.81% on reports the company has lost more than Rs 2500 crore in forex hedging. It had reported foreign exchange-related loss of Rs 784 crore in Q4 December 2008.

India's second largest software outsourcer by sales Infosys Technologies fell 2.15%. Infosys has the second highest weightage of 8.26% on the index. The stock had had lost nearly 3% yesterday, 15 April 2009 after the company issued a weak guidance for the year ending March 2010 (FY 2010).

Infosys has forecast a 3.1% to 6.7% decline in revenue to between $4.35 billion and $4.52 billion as per US GAAP for the year ending March 2010 (FY 2010). The company forecast a 9.5% to 13.6% decline in consolidated earnings per American Depositary Share in the range of $ 1.91 and $ 2.00 for FY 2010. The pricing for the quarter ended March 2009 declined by 3%, S.D.Shibulal, chief operating officer, Infosys said in a statement.

India's largest engineering and construction firm by revenue Larsen & Toubro fell 5.38% even as the company expects its order inflow to grow by 25-35% in the year ending March 2010 (FY 2010). The company said new orders grew 24% to Rs 52000 crore in the financial year that ended on 31 March 2009.

Wind turbine maker Suzlon Energy tanked 18.27% on reports the company faces new problems over blades for a project in China. The company, however, on Thursday denied media reports. Suzlon clarified that blades referred to in the reports are in testing stage and their production has not started yet, the company's chief operating officer (COO) Sumant Sinha said

Gammon India (down 11.35%), Areva T&D (down 10.62%), Crompton Greaves (down 9.95%), Praj Industries (down 9.53%), Punj Lloyd (down 8.25%), and Bharat Heavy Electricals (down 2.59%), were the other capital goods sector shares that fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 4.88% on profit taking after it rose 20.44% in eight straight sessions to Rs 1825.55 on 15 April 2009 from Rs 1515.70 on 30 March 2009. The scrip has the highest weightage of 17.78% on the Sensex. The company recently started pumping gas from the Krishna Godavari (KG) which is estimated to add close to $2 billion to the company's profit at peak production levels.

Private sector oil explorer Cairn India dropped 9.48% after Macquarie Group cut rating on the stock to 'underperform' from 'outperform', citing lower forecasts for crude oil prices.

India's largest state-run oil explorer by market capitalisation Oil & Natural Gas Corporation (ONGC) fell 4.80% after Macquarie Group cut rating on the stock to 'underperform' from 'outperform', citing lower forecasts for crude oil prices.

Reliance Infrastructure (down 9.36%), Jaiprakash Associates (down 8%), Reliance Communication (down 5.48%), and Mahindra & Mahindra (down 4.82%), were the other major Sensex losers.

Sun Pharmaceuticals Industries (up 2.05%), Wipro (up 2.84%), and ACC (up 0.36%), were other major gainers from the Sensex pack.

Shares of FMCG companies rose forecasts of a good monsoon rains this year. Tata Tea (up 3.99%), Nestle (up 3.44%), Hindustan Unilever (up 1.51%), ITC (up 3.21%), and Britannia Industries (up 0.60%), rose. The BSE FMCG Index rose 1.92%.

The International Research Institute (IRI) for Climate and Society at Columbia University has forecast normal-to-slightly-above-normal monsoon for India between June and September this year. A good harvest could boost rural demand for FMCG products.

Banking shares, which had risen in early trade on the back of sharp decline in government bond yields, fell sharply as the session progressed. ICICI Bank (down 3.90%), HDFC Bank (down 1.80%), State Bank of India (down 2.62%), Indian Overseas Bank (down 5.31%), Axis Bank (down 6.66%), and Yes Bank (down 8.36%), declined.

Bond yields slipped to one-month low on Thursday due to surplus cash of more than Rs 1 lakh crore with banks. At 12:30 IST, the 10-year benchmark bond yield was at 6.49%, its lowest since 20 March 2009. It had ended at 6.60% on Wednesday. It may be recalled that many banks had reported robust Q3 December 2008 results on the back of treasury gains as bond prices soared. Bond yields and bond prices are inversely related.

Agrochemicals maker Rallis India spurted 7.09% on posting 25.8% rise in net profit to Rs 9.90 crore in Q4 March 2009 over Q4 March 2008. Net sales rose 33.8% to Rs 193.12 crore in Q4 March 2009 over Q4 March 2008. As the time of announcing results, the board of directors recommended a dividend at the rate of Rs 16 per share (160%).

Liquor maker Radico Khaitan fell 5.05%. According to reports, an entrepreneur Ramesh Vangal is in talks with Radico Khaitan to acquire a controlling interest in the brand portfolio of the liquor firm. Vangal is backed by a large American buyout fund while white spirits giant Bacardi is also a potential suitor for Radico's stake.

Steel tubes and pipes maker Bihar Tubes hit 5% upper circuit as the company achieved close to 75% growth in production in the financial year ended March 2009.

Moulded products maker Supreme Industries jumped 5.59% on reporting 245.8% surge in net profit to Rs 28.56 crore in Q3 March 2009 over Q3 March 2008.Nnet sales rose 35.5% to Rs 442.16 crore in Q3 March 2009 over Q3 March 2009.

Engineering company Honeywell Automation India rose 4.17% after its net profit rose 173.73% to Rs 29.81 crore on 24.62% rise in net sales to Rs 274.78 crore in Q1 March 2009 over Q1 March 2008.