Market slides for the second day in a row; debutants sparkle

The key benchmark indices logged declines for the second running day as global stocks dropped after a massive earthquake in Japan triggered a 10-metre tsunami on the northeast coast of that country today, 11 March 2011. However, there was no tsunami alert by India even as tsunami warnings were issued for many other countries, including Mexico, New Zealand, Indonesia and Taiwan, which helped Indian stock pare intraday losses. The BSE 30-share Sensex was down 153.89 points or 0.84% to 18,174.09, up 110.8 points from the day's low and off 194.34 points from the day's high. The BSE Sensex had declined 0.77% on Thursday, 10 March 2011, on weakness in world stocks caused by continued fighting in Libya and a rating downgrade on Spain.



The market breadth was weak, after swinging between positive and negative zone earlier in the day. Index heavyweight Reliance Industries staged a sharp recovery in late trade. ONGC extended Thursday's gains on buzz a follow-on public offer may be delayed. High beta infrastructure stocks saw an across the board slide on worries higher interest rates could result in project delays and raise borrowing costs. Sudar Garments settled with 46.88% premium and Fineotex Chemical closed with 101.28% premium over the initial public offer price on their debut.

Auto stocks declined on worries further increase in interest rates to tame inflation may dent demand for vehicles. Telecom stocks declined with sentiment taking a hit following reports the government has issued notices to few operators for canceling licences of some circles. Metal stocks declined on worries high global crude oil prices and US unemployment may derail global economic recovery. IT stocks declined on poor economic data in the US, the biggest market for Indian IT firms. Bank stocks dropped ahead of a mid-quarter policy review by the Reserve Bank of India (RBI) next week.

The market came off lows soon after an initial slide caused by weak Asian stocks as crude oil prices extended Thursday's losses. The key benchmark slipped into the red after an intraday recovery pushed in the market into the green for a brief period. Volatility ruled the roost as the market once again faltered in mid-morning trade as reports of powerful earthquake in Japan offset data showing better-than-expected industrial production growth in India in January 2011. The market slumped in early afternoon trade. The market came off lows in afternoon trade. The market was further off the day's low in mid-afternoon trade. The intraday recovery gathered further steam in late trade.

The BSE 30-share Sensex was down 153.89 points or 0.84% to 18,174.09. The Sensex lost 264.69 points at the day's low of 18,063.29 in afternoon trade. The index rose 40.45 points at the day's high of 18,368.43 in mid-morning trade.

The S&P CNX Nifty was down 48.95 points or 0.89% to 5,445.45. The Nifty hit a high of 5,502.70 and low of 5,411.55 during the day.

The market breadth, indicating the health of the market, was weak after swinging between positive and negative zone earlier in the day. On BSE, 1958 shares declined while 935 shares gained. A total of 115 shares remained unchanged.

The BSE Mid-Cap index fell 1.07% and the BSE Small-Cap index declined 1.12%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 3241 crore, higher than Rs 2996 crore on Thursday, 10 March 2011.

Eleven out of the 13 sectoral indices on the BSE edged lower. The BSE Metal index (down 1.91%), the BSE TecK index (down 1.61%), and the BSE IT index (down 1.49%), underperformed the Sensex. The BSE Oil & Gas index (up 0.81%), the BSE FMCG (up 0.03%), and the BSE Healthcare index (down 0.25%), outperformed the Sensex.

Among the 30-share Sensex pack, 24 declined only six of them managed gains.

Telecom stocks declined with sentiment taking a hit following reports the government has on Thursday, 10 March 2011, issued notices to Idea cellular for Punjab circle and Etisalat DB for Delhi and Mumbai circles for cancelling their 2G licences for missing roll-out obligations. Bharti Airtel (down 2.18%), and MTNL (down 3.55%), declined.

Idea Cellular lost 2.19% on reports the telecom ministry has asked the company to explain why its license in Punjab should not be cancelled after it failed to meet network rollout requirements.

India's second largest listed cellular services provider by sales Reliance Communications lost 3.61% to Rs 96.15 and was the top loser from the Sensex pack.

High beta infrastructure stocks saw an across the board slide on worries higher interest rates could result in project delays and raise borrowing costs. Construction firms typically are working capital intensive. Jaiprakash Associates (down 2.90%), Larsen & Toubro (down 0.86%), Reliance Infrastructure (down 3.25%), declined.

India's largest power equipment maker by sales Bharat Heavy Electricals declined 3.51% after 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.

Index heavyweight Reliance Industries (RIL) rose 0.82% to Rs 992.55, off the day's low of Rs 971.90. RIL's gas production is expected to rise 23% to 65 million metric standard cubic meters (mmscmd) daily from its gas-producing block in the Krishna Godavari basin, off country's east coast, from April 2011. RIL currently produces 53 mmscmd a day.

India's largest oil exploration firm by market capitalization Oil & Natural Gas Corporation (ONGC) rose 2.03% to Rs 281 and was the top gainer from the Sensex pack. The stock extended Thursday's 1.62% gain on reports the government has deferred the share sale of the state-owned firm to the second half of 2011 following a faux pas in the appointment of independent directors on the company's board. The government plans to sell 5%, or 42.78 crore equity shares, through the follow-on public offer (FPO) to raise up to Rs 12000 crore.

Most auto stocks declined on worries further increase in interest rates to tame inflation may dent demand for vehicles. India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) lost 1.59% and India's largest car maker by sales Maruti Suzuki India shed 1.50%.

India's largest bike maker by sales Hero Honda Motors fell 0.51% while India's second largest bike maker by sales Bajaj Auto declined 2.02%. India's top truck maker by sales Tata Motors rose 0.28% to Rs 1167.05, off day's low of Rs 1131.50.

Banking stocks dropped ahead of a mid-quarter policy review by the Reserve Bank of India (RBI) next week. India's largest private sector bank by net profit ICICI Bank slipped 0.61%. India's second largest private sector bank by net profit HDFC Bank declined 1.09%. India's largest bank by net profit and branch network State Bank of India was down 0.57%.

Six out of 10 economists polled by Capital Market expect 25 basis points increase in repo rate and reverse repo rate each from the Reserve Bank of India (RBI) at a mid-quarter policy review on 17 March 2011. The rest 4 economists expect no change in policy rates.

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.

Metal stocks declined on worries high global crude oil prices and US unemployment may derail global economic recovery. LMEX, a gauge of six metals traded on the London Metal Exchange dropped 0.36% on Thursday, 10 March 2011. India's largest non-ferrous metal firm by capacity Sterlite Industries lost 3.06%

India's largest private sector steel maker by sales Tata Steel fell 2.52%, extending Thursday's 2.59% decline after 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.

IT stocks declined on poor economic data in the US, the biggest market for Indian IT firms. India's third largest software services exporter Wipro fell 1.27%. The company has signed a five-year strategic contract to drive Canara Bank's Regional Rural Bank (RRB) initiative. The deal would help Wipro expand its footprint in the rapidly growing banking and financial services vertical.

India's second largest software services exporter Infosys slipped 1.02% after its ADR lost 2.36% on Thursday, 10 March 2011. India's largest software services exporter TCS shed 2.36%

Tata Global Beverages soared 4.97%, tracking a rally in shares of its subsidiary -- Tata Coffee. Shares of Tata Coffee extended a recent solid surge triggered by buoyancy in coffee prices.

Shares of Sudar Garments settled at Rs 113.10, a 46.88% premium over the initial public offer price of Rs 77. The stock debuted at Rs 74, a discount of 3.89% to the initial public offer (IPO) price. It hit a high of Rs 117.70 and low of Rs 74.

Shares of Fineotex Chemical settled at Rs 140.90, a 101.28% premium over the initial public offer price of Rs 70. The stock debuted at Rs 80, a premium of 14.28% over the initial public offer (IPO) price. It hit a high of Rs 157.90 and low of Rs 74.10.

Fineotex Chemical clocked highest turnover of Rs 407.20 crore on BSE. Sudar Garments (Rs 347.23 crore), Tata Coffee (Rs 344.12 crore), Acropetal Technologies (Rs 167.90 crore) and Tata Steel (Rs 152.96 crore) were the other turnover toppers in that order.

Fineotex Chemical clocked highest volume of 3.45 crore shares on BSE. Sudar Garments (3.42 crore shares), Sanraa Media (1.93 crore shares), Acropetal Technologies (1.61 crore shares) and Cals Refineries (1.36 crore shares) were the other volume toppers in that order.

Government data released today, 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%.

The south-west monsoon is likely to be normal for the second straight year in 2011. Good rains would boost farm output that could help the government tame high food prices. Good rains will boost rural income. The India Meteorological Department (IMD) will come out with its first forecast on this year's monsoon season in April 2011 with periodic reviews as the four-month season progresses.

Crude extended Thursday's slide as signs of weakening demand in the US countered concern that Libyan supply cuts will spread through the Middle East. US crude futures were down $2.82 or 2.75% to $99.88 a barrel. Oil prices have come off 29-month highs after a sharp recent rally triggered by unrest in oil rich Middle East and North Africa regions. India imports majority of its crude oil requirements.

European shares slipped to a three-month low on Friday, with market sentiment worsening further after a massive quake hit Japan and on growing unrest in the Arab world. The key benchmark indices in UK, Germany and France were down by between 0.59% to 1.02%.

Japan's Nikkei 225 index lost 1.72% after Japan issued its most serious tsunami warning, saying a wave as high as 6 metres or 20 feet could strike the coast near Miyagi prefecture. A powerful earthquake shook northeastern Japan Friday and strong tremors caused violent shaking to buildings in Tokyo. Reportedly an 8.8-magnitude earthquake struck about 250 miles or 400 kilometres from Tokyo at a depth of 20 miles. Warning has been extended for big tsunami to more areas on Pacific coast.

The Bank of Japan said Friday it will do everything it can "including the provision of liquidity, to ensure the stability in financial markets and to secure the smooth settlement of funds."

Asian stock markets fell on Friday as Middle East violence and US unemployment stoked concern that a global economic recovery may falter. The key benchmark indices in Hong Kong, Singapore, China, Taiwan, South Korea and Indonesia were down by between 0.73% to 1.31%.

Reports Thursday that Saudi Arabian police fired rubber bullets to disperse about 200 Shiite protesters in the eastern town of Qatif heightened risk aversion, after sentiment had already taken a hit by a downgrade of Spain's government debt and a surprise trade deficit in China.

US stocks were routed Thursday, 10 March 2011, as rumblings of unrest in Saudi Arabia compounded economic worries abroad and in the US. The Dow Jones Industrial Average lost 228.48 points, or 1.87%, to 11,984.61. The Standard & Poor's 500-stock index retreated 24.91 points, or 1.89%, to 1295.11 and the Nasdaq Composite fell 50.70 points, or 1.84%, to 2701.02.

According to the Department of Labor, the number of people filing initial requests for unemployment compensation rose to a seasonally adjusted 397,000 in the week ended 5 March 2011. This was an increase of 26,000 from last week's upwardly revised level of 371,000.

The US government's budget deficit grew by $222.5 billion in February, the largest one-month increase in history. Year-to-date, the deficit is $641.2 billion, according to Treasury. The White House expects the US budget deficit to hit $1.6 trillion this year before falling to $1.1 trillion in 2012.

Trading in US index futures indicated that the Dow could slide 70 points at the opening bell on Friday, 11 March 2011. US index futures reversed initial gains.