Market loses ground amid choppy trade

The market edged lower as tension in Middle East and North Africa region and a major earthquake in Japan on Friday, 11 March 2011, sapped risk appetite. Political worries early in the week, which abated later, triggered volatility. With the ongoing violence in Libya keeping crude-oil prices above $100 a barrel, market men fear the government might soon have to let fuel prices from state-owned energy firms rise.



The BSE Sensex fell 312.36 points or 1.69% to 18,174.09 in the week ended Friday, 11 March 2011. The S&P CNX Nifty fell 93.30 points or 1.68% to 5445.45. The BSE Mid-Cap index fell 0.95% and the BSE Small-Cap index fell 1.24%. Both the indices outperformed the Sensex.

Government data released on Friday, 11 March 2011 showed the index of industrial production (IIP) rose 3.7% in January 2011, higher than market expectations. Manufacturing output which constitutes about 80% of the industrial production rose an annual 3.3% in January 2011, the Central Statistics Office said in a statement. Industrial production growth for December 2010 was revised upwards to 2.5% from 1.6%.

Food price index rose an annual 9.52% in the week to 26 February 2011, slower than a 10.39% rise in the previous week as prices of vegetables, potatoes and rice declined, data showed on Thursday, 10 March 2011. Fuel price index climbed up 9.48% in the same week from 12.56% a week earlier.

Trading for the week began on a dull note. The key benchmark indices edged lower on Monday, 7 March 2011 as investors shunned equities amid concerns about high oil prices and a spat on seat sharing in assembly polls in Tamil Nadu between the Congress and its regional ally DMK. Nevertheless, the market came off the day's low after a steep intraday slide on market buzz the Congress and DMK may resolve differences over seat-sharing in assembly polls in Tamil Nadu and that a pact may be worked out by the two sides shortly. The BSE 30-share Sensex was down 263.78 points or 1.43% to 18,222.67. The S&P CNX Nifty was down 75.60 points or 1.36% to 5,463.15. DMK is a key ally of the UPA government, with 18 seats in the Lok Sabha.

The DMK, which had decided on 5 March 2011, that it would pull out its ministers from the UPA government due to difference over seat sharing in assembly polls in Tamil Nadu, said after trading hours on Monday that the resignations were put on hold following a request by Finance Minister Pranab Mukherjee to wait for one more day to sort out the differences.

The key benchmark indices recovered on Tuesday, 8 March 2011 as global equities cheered a mild decline in crude oil prices from a 29-month high and as political worries eased after the Dravida Munnetra Kazhagam (DMK) on Monday put on hold the resignation of its six ministers from the Congress-led UPA government at the Centre. The BSE 30-share Sensex was up 216.98 points or 1.19% to 18,439.65. The S&P CNX Nifty was up 57.65 points or 1.06% to 5,520.80.

The key benchmark indices registered small gains in volatile trade on Wednesday, 9 March 2011 as crude oil prices traded off 29-month highs hit recently, which helped ease inflation concerns. Also lifting sentiment, the Congress and DMK on Tuesday, 8 March 2011, clinched a seat sharing deal for the forthcoming assembly polls in Tamil Nadu (TN), ending a crisis that threatened to slow planned reforms by the Congress-led United Progressive Alliance (UPA) coalition government at the Centre. The BSE 30-share Sensex was up 30.30 points or 0.16% to 18,469.95. The S&P CNX Nifty was up 10.20 points or 0.18% to 5,531.

The key benchmark indices edged lower on Thursday, 10 March 2011, snapping last two days' gains, as world stocks fell on continued fighting in Libya and on a rating downgrade on Spain. European stocks dropped after Moody's Investors Service cut its rating on Spanish sovereign debt. The BSE 30-share Sensex was down 141.97 points or 0.77% to 18,327.98. The S&P CNX Nifty was down 36.60 points or 0.66% to 5,494.40.

The key benchmark indices dropped for the second day in a row on Friday 11 March 2011, as a powerful earthquake shook northeastern Japan. The BSE 30-share Sensex was down 153.89 points or 0.84% to 18,174.09. The S&P CNX Nifty was down 48.95 points or 0.89% to 5,445.45.

Among the 30-share Sensex pack, 25 declined only five of them managed gains.

India's largest steel maker by sales Tata Steel tumbled 5.76% to Rs 582. Tata Steel Group Director (Procurement) Kees Gerretse said expenses on key raw material are likely to go up by $1 billion in the current fiscal to $7 billion due to a rise in input costs. The costs on inputs would further escalate by around 15% next fiscal over 2010-11 levels, he added, attributing the rise to higher iron ore and coking coal prices, which went past $300 a tonne as a result of a global scarcity in the wake of floods in Australia's Queensland.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) declined 5.29% at Rs 1974.70. The firm's chief told the media that the firm may miss its order growth target of Rs 60000 crore for the year ending March 2011 due to slowdown in new domestic orders. Bhel was the second biggest Sensex loser.

India largest IT company by sales TCS slipped 5.13% to Rs 1076.25. TCS was the third biggest Sensex loser.

State Bank of India (down 4.76%), Maruti Suzuki (down 4.65%), Larsen & Toubro (down 4.28%), Jindal Steel & Power (down 4.01%) and Sterlite Industries (down 3.90%), were the other major Sensex losers.

India's largest oil exploration firm by market capitalization Oil & Natural Gas Corporation (ONGC) galloped 4.73% to Rs 281.3 on reports the company's upcoming Rs 14,000 crore follow-on-public offer (FPO) may be postponed until May or June 2011. ONGC was the top Sensex gainer last week.

India's second largest listed telecom operator by sales Reliance Communications (RCom) jumped 3.22% to Rs 96.3 after the company said it will save over Rs 500 crore in annual interest cost after securing aggregate financing of Rs 8700 crore from a Chinese bank. RCom said it completed final documentation with China Development Bank (CDB) for aggregate financing of Rs 8700 crore with a maturity period of 10 years.

RCom said the loan would be fully underwritten by CDB and would be funded by a syndicate of Chinese banks and financial institutions including CDB. The draw-down of the loan, which will be used for paying mobile spectrum fees and buying telecom equipment, is likely to start this month. RCom was the second biggest Sensex gainer.

India third largest IT company by sales Wipro rose 1.69% to Rs 449.05. Wipro has reportedly won a 5-year IT contract from state-run Canara Bank to provide its banking solution to three of the lender's rural banks.

Among other Sensex gainers, India's largest real estate developer by market capitalisation DLF rose 1.19% to Rs 225.10 and index heavyweight Reliance Industries rose 1% to Rs 991.60.