Sensex sheds nearly 3% in three days on profit taking

The key benchmark indices edged lower, extending losses for the third straight day, as weak global stocks and lower US index futures weighed on investor sentiment. The BSE 3/0-share Sensex fell 83.73 points or 0.54%, off close to 155 points from the day's high and up close to 80 points from the day's low.

Index heavyweight Reliance Industries fell in volatile trade. Realty and capital goods stocks fell. Auto stocks were mixed. IT stocks rose on a weaker rupee. The market breadth was weak after moving between the positive and negative breadth zone during the trading session.

The market was volatile. The key benchmark indices recovered and turned into green after a weak start triggered lower Asian stocks and losses on the Wall Street on Tuesday, 1 September 2009. The market once again slipped into the red in mid-morning trade. The market bounced back again with the Sensex surging to fresh intraday high in early afternoon trade. The market once again slipped into the red in afternoon trade. The market moved between positive and negative and terrain in mid-afternoon trade. The market weakened in late trade.

India's exports fell an annual 28.4% in July 2009 over July 2008 and imports fell 37.1%, data released by the government during on Tuesday, 1 September 2009, showed.

A latest survey showed India's manufacturing activity expanded at its slowest pace in five months in August 2009. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to a five-month low of 53.2 in August 2009 from a revised reading of 55.4 in July 2009. The new orders index fell to 56.2 in August 2009, also its lowest in four months, from 60 in July 2009.

The PMI has been above 50, which separates expansion from contraction, for five months. Before that, it shrank for the five months through March 2009, hitting a trough of 44.4 in December 2008.

India's gross domestic production (GDP) grew 6.1% in Q1 June 2009 compared with the year-earlier, figures released by the Central Statistical Organisation announced on Monday, 31 August 2009, showed. The segment grouping financing, insurance, real estate and business services led growth in GDP, gaining 8.1% on year. The category including trade, hotels, transport and communication was also up 8.1%.

The GDP growth was lower than 7.8% achieved in Q1 June 2008 but it accelerated from the 5.8% expansion in Q4 March 2009.

Farm secretary T. Nanda Kumar today said improved monsoon rains in recent days will boost crop prospects for rice and sugar cane. He said other crops would also gain.

The monsoon witnessed a revival in the second half of August 2009 but the cumulative rains were still a quarter below average till last week. Drought or drought-like conditions have been declared in 278 districts or 44% of the nation's total, as rainfall has been 25% below average so far in the four- month monsoon season that started on 1 June 2009, the farm ministry said on 27 August 2009.

European stocks dipped on Wednesday, losing ground for the third straight session, with banking shares among the most hit. Key benchmark indices in France, Germany and UK were down by between 0.09% to 0.44%.

Asian shares dropped on Wednesday after a sell-off on Wall Street on Tuesday prompted profit taking. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore fell by between 0.61% to 2.37%.

But, China's Shanghai Composite rose 1.16%, led higher by bank stocks, after a report showed that banks lent 320 billion yuan in August 2009, a smaller figure than in previous months, but higher than some feared. Taiwan's Taiwan Weighted index gained 0.29%.

Trading in US index futures indicated Dow could open flat on Wednesday, 2 September 2009.

US markets started the month of September with a sharp selloff on Tuesday, 1 September 2009 on the back of worries about more bank failures and on concerns fact that the market may have gotten ahead of the economic recovery. The Dow slipped 185.68 points, or 2%, to 9,310.60. The S&P 500 fell 22.58 points, or 2.2%, to 998.04, while the Nasdaq Composite Index fell 40.17 points, or 2%, to 1,968.89.

The ISM manufacturing index rose to 52.9 in August from 48.9 in July. This was better than the 50.5 that was expected, it was also first time the reading topped 50 since January 2008. A reading above 50 indicates expansion in manufacturing.

Pending-home sales jumped 3.2% in July to their highest level since June 2007. It was the sixth straight increase and better than the 2% rise economists had expected. But construction spending slipped 0.2% in July against a 0.1% uptick in June.

The BSE 30-share Sensex lost 83.73 points or 0.54% to 15,467.46. The Sensex rose 76.91 points at the day's high of 15628.10 in early afternoon trade. The Sensex fell 158.51 points at the day's low of 15,392.68 in early trade.

The S&P CNX Nifty was down 17 points or 0.37% to 4,608.35. Nifty September 2009 futures were at 4618.20, at a premium of 9.85 points as compared to the spot closing of 4608.35. Turnover in NSE's futures & options (F&O) segment was Rs 63,487.76 crore, much lower than Rs 74,486.28 crore on Tuesday, 1 September 2009.

BSE clocked a turnover of Rs 5412 crore, lower than Rs 7547.38 crore on Tuesday, 1 September 2009.

The BSE Sensex has lost 454.88 points or 2.85% in the last three days after gaining for seven straight days. The Sensex had jumped 1112.70 points or 7.51% in seven trading sessions to settle at 15,922.34 on Friday, 28 August 2009 from 14,809.64 on 19 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 5820.15 points or 60.32% in calendar year 2009 as on 2 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7307.06 points or 89.54% as on 2 September 2009. FII inflow in calendar year 2009 totaled Rs 39895.46 crore (till 1 September 2009)

The market breadth, indicating the overall health of the market, was weak after hovering between positive and negative zone earlier. On BSE, 1154 shares declined as compared with 1604 that rose. A total of 80 shares remained unchanged.

Among the 30-member Sensex pack, 21 fell while rest rose.

The BSE Mid-Cap index fell 0.68% and underperformed Sensex. The BSE Small-Cap index fell 0.35%. It outperformed Sensex.

The BSE IT index (up 0.98%), the BSE Teck index (up 0.52%), the BSE Healthcare index (up 0.28%), the BSE FMCG index (up 0.26%), the BSE Oil & Gas index (up 0.16%), the BSE Consumer Durables index (down 0.19%), the BSE PSU index (down 0.35%), the BSE Metal index (down 0.44%), outperformed the Sensex.

The BSE Realty index (down 1.76%), the BSE Auto index (down 1.36%), the BSE Capital Goods index (down 1.26%), the BSE Power index (down 1.08%), the BSE Bankex (down 0.61%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 0.52% to Rs 1971.75. The stock hit a high of Rs 1997.10 and a low of Rs 1956.30. The government on Tuesday amended the special leave petition filed in the Supreme Court stating that the country's largest utility NTPC and Anil Ambani's Reliance Natural Resources (RNRL) were not on the same footing with regard to the supply of gas from the Krishna-Godavari basin by Reliance Industries (RIL). The price of gas to be paid by NTPC, the government said in its application, will be considered in-dependently of the RIL-RNRL case.

The biggest change in the government's stand on Tuesday is its categorical assertion that the government-set price of $4.20 per MMBTU was not applicable to a disputed contract between NTPC and RIL.

The Bombay High Court had asked RIL to supply 28 million standard cubic meters (mmscmd) of gas to RNRL at $2.34 per mmbtu. RIL has appealed this decision in the apex court. Subsequently, the ministry of oil and natural gas had also moved the apex court by filing an independent SLP. It was only an intervenor before the high court in the case.

Meanwhile, as per media reports, Reliance Industries is planning a foray into the global pipeline construction business with a bid for building oil and gas pipeline in Mexico worth Rs 3000 crore.

India's largest thermal power producer by sales NTPC fell 1.19% and RNRL rose 2.38%.

India's largest oil exploration firm by market capitalisation ONGC fell 0.43% on fall in crude oil prices. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms. ONGC had on Friday, 28 August 2009, said it has discovered gas at a block in the north-eastern state of Tripura. The gas contains up to 96.3% methane. The announcement was made after trading hours on Friday.

PSU OMCs rose as crude-oil futures ended lower Tuesday. BPCL, Indian Oil Corporation and HPCL rose by between 3.44% to 6.64%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Light, sweet crude for October delivery settled $1.91, or 2.7%, lower at $68.05 a barrel on the New York Mercantile Exchange on Tuesday as investor confidence in a quick US economic recovery faltered.

IT stocks rose on improved economic data in the US. US is the biggest market for IT firms. A weak rupee also aided gains. India's second largest software services exporter Infosys Technologies rose 1.05% even as its ADR fell 0.23% on Tuesday. A foreign brokerage, last week, reduced its rating on the stock 'underweight' from 'equal-weight', saying the stock's valuation is 'rich'.

India's largest software services exporter TCS rose 1.19% after a foreign brokerage raised its rating on the stock to 'overweight' from 'neutral'. The brokerage said the company is a 'solid defensive investment'. But, India's third largest software services exporter Wipro fell 0.8% as its ADR fell 0.63% on Tuesday.

In one of the largest deals, the top-three Indian vendors Infosys, TCS and Wipro along with IBM Corp, last week, bagged a slice of the $1.5 billion five year information technology (IT) outsourcing contract from British Petroleum Pcl (BP), one of the world's largest integrated oil and gas companies.

The Indian rupee came off a 1-1/2 month low against the dollar. The partially convertible rupee settled at 49.03/04 per dollar, almost unchanged for the day. It initially dropped to 49.21, which was its weakest since 13 July 2009. A weak rupee boost revenues of IT firms in rupee terms as the sector derives a lion's share of revenues from exports.

Realty stocks fell on profit taking after recent gains. DLF, Unitech, Indiabulls Real Estate, Phoenix Mills, fell by between 1.18% to 3.78%.

As per reports the demand for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and a recovery in the job market. Realty market had slumped last year amid a global credit crunch and buyers fearing job losses.

Auto stocks were mixed after recent strong gains triggered by healthy sales in August 2009. Maruti Suzuki, India's top car maker by sales, fell 2.27% on profit taking after Tuesday's 7.61% rally. The company's total vehicle sales rose 41.6% to 84,808 units in August 2009 over August 2008. The company announced August sales figures during market hours on Tuesday.

Indian largest tractor maker by sales Mahindra & Mahindra fell 2.09%. Mahindra & Mahindra's (M&M) total vehicle sales rose 15% to 22,063 units in August 2009 over August 2008. The company announced August sales figures during market hours on Tuesday.

India's largest truck marker by sales Tata Motors was flat at Rs 518.20 after the stock jumped nearly 6% on Tuesday. The company's vehicle sales rose 14.23% to 49810 units in August 2009 over August 2008. The company announced August sales figures after market hours on Tuesday.

India's largest motorbike maker by sales Hero Honda Motors rose 1.4%. The company's sales rose 36% in August 2009 over August 2008. TVS Motor company was flat after more than 5% gains on Tuesday. The two wheeler maker reported a 10.95% jump in sales to 126,842 units in August 2009 over August 2008. Both Hero Honda and TVS announced August sales figures during market hours on Tuesday.

Construction and capital goods fell on profit taking. From capital goods space, Bharat Heavy Electricals, Thermax, ABB, Siemens, Praj Industries, BEML, Punj Lloyd, fell by between 0.08% to 3.1 %.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 1.07%. The company's chairman A M Naik said on Friday, 28 August 2009, the company expects to make a profit of up to Rs 250 crore on its shares in outsourcer Mahindra Satyam. He added that L&T is expected to sell Mahindra Satyam shares by March next year.

L&T had built a 12% stake in Mahindra Satyam, formerly Satyam Computer, before losing out in the race for a controlling stake in the firm earlier this year to Tech Mahindra.

From the construction pack, Nagarjuna Construction Company, IVRCL Infrastructure, Hindustan Construction Company, Era Infra Engineering, fell by between 0.08% to 0.93%.

Higher government spending on infrastructure sector in 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction and capital goods firms

Metal stocks fell as LMEX, a gauge of six metals traded on the London Metal Exchnage fell 3.6% on Tuesday, 1 September 2009. JSW Steel, Jindal Saw, National Aluminum Company fell by between 1.19% to 3.6%.

India's largest steel maker by sales Tata Steel was down 0.24%, extended recent losses. Tata Steel reported a net loss of Rs 2208.68 crore in Q1 June 2009 on a consolidated basis compared with a net profit of Rs 3900.90 crore in Q1 June 2008. Total income fell 46% to Rs 23496.21 crore in Q1 June 2009 over Q1 June 2008. The result was announced during market hours on Thursday, 27 August 2009.

India's largest copper maker by sales Sterlite Industries fell 3.16%. A US bankruptcy court has rejected Sterlite Industries' bid to acquire Asarco, six months after the Indian company had signed an agreement to acquire the beleaguered US copper miner. The bankruptcy court in Corpus Christi, Texas, recommended the offer of rival Grupo Mexico. The case has been sent to the US District Court Judge Andrew S Hanen in Texas for a final decision, which is expected in the next four to six weeks time. Sterlite has been chasing Asarco since last year.

Cement stocks fell mostly lower. India's largest cement maker by sales ACC fell 0.1% even as its cement dispatches rose 7.14% to 1.65 million tonnes in August 2009 over August 2008. ACC announced the sales figure during market hours today.

Ambuja Cements rose 1.32% after cement sales rose, albeit slightly, to 1.43 million tonnes in August 2009 from 1.42 million tonnes in August 2008.

UltraTech Cement, Grasim Industries, Birla Corporation, fell by between 1.44% to 1.93%.

Shares of state-run hydropower generator NHPC fell 0.82% to Rs 36.40. A huge volume of 3.38 crore shares was recorded in the stock on BSE. The stock had settled at Rs 36.70 on BSE on the day of its debut on Tuesday, a premium of less than 2% over the IPO price.

Among other power stocks, GVK Power & Infrastrucutre, Reliance Infrastructure, Torrent Power, CESC, fell by between 0.18% to 1.27%.

Tata Power Company fell 1.37% extending recent decline even as consolidated net profit rose 160.47% to Rs 572.65 crore on 15.71% rise in total income to Rs 4781.89 crore in Q1 june 2009 over Q1 June 2008. The results were announced on Friday, 28 August 2009.

Drug maker Ranbaxy Laboratories rose 1.03% and another drug maker Strides Arcolab rose more 6% after the two companies got government orders to supply the generic version of Roche's anti-viral, Tamiflu, used to treat the H1N1 flu.

Among other healthcare stocks, Biocon, Lupin, Dr Reddy's Laboratories and Aurobindo Pharma, rose by between 0.67% to 1.07%.

Bank stocks fell on weak American depository receipts on Tuesday. India's largest private sector bank by net profit ICICI Bank fell 1.15% as its American depository receipt (ADR) fell 3.83% on Tuesday. The bank has launched a special offer for new home loan borrowers effective from 20 August 2009. Under this, interest rates for home loans upto Rs 20-lakh will now be at 8.75%. For loans between Rs 20-Rs 50 lakh, the new rates will be 9.25% while those above Rs 50-lakh, the rate has been fixed at 9.75%.

India's second largest private sector bank by net profit HDFC Bank fell 0.6% as its ADR fell 3.49% on Tuesday.

But, India's biggest bank in terms of branch network State Bank of India (SBI) rose 0.11%. Bank's Chairman O P Bhatt said on Friday interest rates will remain stable for next six months. It is difficult to say whether rates have bottomed out, he said.

India's second largest mobile telecom services provider by sales Reliance Communications rose 4.56% on reports it has prepaid Rs 5,000 crore term loan raised from various domestic and foreign banks less than a year ago for three to five year terms. This will help the company save Rs 700 crore on annual interest costs.

Shares of some tea makers rose on firm tea prices. Tea prices have risen in tea auction due to fall in production in Kenya, India and Sri Lanka. Assam Tea & Exports, Harrison Malayalam, Warren Tea, Mcleod Russell rose by between 0.05% to 1.35%.

Sugar stocks rose as fall in sugar production in India has pushed global prices to multi-year highs. Shree Renuka Sugars, Dhampur Sugars and Balrampur Chini rose by between 0.24% to 4.1%.

NHPC clocked the highest volume of 3.38 crore shares on BSE. Suzlon Energy (1.97 crore), Unitech (1.89 crore shares), Mahindra Satyam (1.77 crore shares) and Dish TV (1.09 crore shares) were the other volume toppers in that order.

Reliance Capital clocked the highest turnover of Rs 234.92 crore on BSE. Mahindra Satyam (Rs 213.74 crore), Unitech (Rs 194.57 crore), Suzlon Energy (Rs 191.61 crore) and DLF (Rs 164.31 crore) were the other turnover toppers in that order.