Sensex at 2-week low on Japan nuclear crisis

Bargain hunting and cooling oil prices triggered intraday recovery on the bourses after a sell-off at the onset of the trading session triggered by a worsening nuclear crisis in Japan. Intraday volatility was high. The BSE 30-share Sensex was down 271.84 points or 1.47%, up 247.09 points from the day's low and off 158.69 points from the day's high. The barometer index settled at 2-week closing low as world stocks fell after a steep slide in Japanese stocks caused by radiation leakage from a nuclear plant hit by Friday's (11 March 2011) earthquake and tsunami in that country. The market breadth was weak.



Index heavyweight Reliance Industries surged over 1.5%, reversing initial losses. Metal stocks fell on a sell-off in commodities triggered by worries Japan's strongest quake and a worsening nuclear accident may hurt global economic recovery. Banking stocks declined after the latest data showed rise in inflation. Auto stocks also edged lower on fresh selling. Tyre shares rose, extending recent strong gains, as natural rubber prices tumbled following last week's devastating earthquake and Tsunami in Japan.

Indian shares were choppy. The market tumbled in opening trade as Japanese shares led a sharp slide in Asian stocks after Japanese Prime Minister Naoto Kan said a substantial amount of radiation was leaking from a nuclear power plant affected by Friday's (11 March 2011) massive earthquake and tsunami. The market soon came off lows. The market tumbled again to hit fresh intraday low in morning trade. The market once again came off lows later. The intraday recovery gathered steam in mid-morning trade. The market held off lows in early afternoon trade. Volatility continued as the market pared gains after hitting a fresh intraday high in mid-afternoon trade. Market came off day's high in late trade.

US crude futures were down $2.79 a barrel or 2.76% to $98.40 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.

The BSE 30-share Sensex was down 271.84 points or 1.47% to 18,167.64, its lowest closing since 28 February 2011. The index slumped 518.93 points at the day's low of 17,920.55 in morning trade. The Sensex fell 113.15 points at the day's high of 18,326.33 in mid-afternoon trade.

The S&P CNX Nifty was down 81.85 points or 1.48% to 5,449.65. The Nifty hit a low of 5,373.65 in early trade, its lowest level since 1 March 2011.

The market breadth, indicating the health of the market, was weak. On BSE, 1,983 shares declined while 886 shares gained. A total of 101 shares remained unchanged.

The total turnover on BSE amounted to Rs 3644 crore, higher than Monday's turnover of Rs 2982 crore

The BSE Mid-Cap index fell 1.43%, outperforming the Sensex and the BSE Small-Cap index declined 1.63%, underperforming the Sensex.

Twelve out of the 13 sectoral indices on the BSE logged declines. The BSE Realty (down 3.14%), the BSE Metal (down 2.03%), and the BSE Auto (down 2.02%), underperformed the Sensex. The BSE Oil & Gas (up 0.32%), the BSE Consumer Durables (down 0.65%), and the BSE Healthcare (down 1.35%), outperformed the Sensex.

Reliance Industries was the lone gainer among the 30-member Sensex pack. The index heavyweight surged 1.61% to Rs 1034, off sharply from day's low of Rs 990.15. 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 and Natural Gas Corporation (ONGC) declined 3.29%. The company has reportedly made a significant gas discovery in a block in the north-eastern state of Tripura and has informed the upstream regulator about the discovery.

India's largest listed telecom operator by sales Bharti Airtel fell 2.04%. The company on Monday, 14 March 2011, announced the launch of its 'airtel broadband TV', which will allow its broadband users to watch live TV on their computers for a monthly rental of Rs 99

India's top truck maker by sales Tata Motors slipped 2.31%. The company's global vehicle sales rose 14% to 1.02 lakh units in February 2011 over February 2010. Sales of Tata Motors' British brands Jaguar and Land Rover rose 26% to 21,653 units in February 2011 over February 2010, driven by a 33% rise in Land Rover sales.

India's largest carmaker by sales Maruti Suzuki India lost 3.75% on concerns nuclear accident in Japan that followed a powerful earthquake and tsunami that struck Japan last week may hurt its imports from the country. Maruti Suzuki has substantial imports of raw materials from its Japanese parent Suzuki Motor.

Other auto stocks also edged lower on fresh selling. India's top truck maker by sales Tata Motors fell 2.31%. India's top bike maker by sales Hero Honda Motors was down 0.47%. India's second largest bike maker by sales Bajaj Auto shed 1.49%.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) declined 2.58%. M&M has announced completion of all formalities related to the acquisition of a majority stake in South Korea's SsangYong Motor Company (SYMC).

Banking stocks declined after latest data showed rise in inflation in February 2011. India's second largest private sector bank by net profit HDFC Bank slipped 0.71%. The bank raised its minimum lending rate, or base rate, by 50 basis points (bps) and the benchmark prime lending rate (BPLR) by 75 bps with effect from 14 March 2011. This is the second time in less than a month that HDFC Bank has increased its minimum lending rate. The bank has also raised interest rates on select term deposits by 25-100 bps.

India's largest private sector bank by net profit ICICI Bank fell 2.04%. India's largest bank by net profit and branch network State Bank of India declined 1.05%.

Central Bank of India rose 2.35% after the bank said after market hours on Monday, 14 March 2011, its Rs 2,500 crore rights issue will open on 24 March 2011 and close on 7 April 2011.

Central Bank of India has proposed to issue equity shares on a rights basis in the ratio of 3 shares for every 5 shares held by shareholders. The board has already approved Rs 103 as issue price for every right equity shares. Besides, the bank has fixed 18 March 2011 as record date for the purpose of ascertaining shareholders entitled for rights issue.

The wholesale price index (WPI) rose an annual 8.31% in February 2011 on higher fuel and manufactured product prices, government data showed on Monday, 14 March 2011. The figure was above market expectations and it was also higher than the annual rise of 8.23% in January 2011. The annual reading for December 2010 was revised upwards to 9.41% from 8.43%.

The Reserve Bank of India (RBI) undertakes a mid-quarter policy review on Thursday, 17 March 2011. Twelve out of 16 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) on 17 March 2011. The rest 4 economists expect no change in policy rates.

Metal stocks fell on a sell-off in commodities triggered by worries Japan's strongest quake and a worsening nuclear accident may hurt global economic recovery. Sterlite Industries (down 3.07%), Hindalco Industries (down 2.27%), Tata Steel (down 0.92%), Jindal Steel & Power (down 0.27%), declined.

India's largest power equipment maker by sales Bharat Heavy Electricals declined 2.72%. The company's board has declared and approved payment of interim dividend of Rs 13.25 per equity share for the year ending March 2011.

India's largest software services exporter by sales Tata Consultancy Services (TCS) fell 0.49%. The company won a multi-year order from Netherland-based Royal Haskoning to provide end-to-end IT infrastructure project to build an internationally scalable operating model.

Jaiprakash Associates (down 3.80%), DLF (down 3.07%), and Larsen & Toubro (down 2.17%), edged lower from the Sensex pack.

Tyre shares rose, extending recent strong gains, as natural rubber prices tumbled following last week's devastating earthquake and Tsunami in Japan. J K Tyre & Industries (up 6.70%), CEAT (up 0.91%), Goodyear India (up 0.19%), MRF (up 1.95%) and Apollo Tyres (up 1.77%) edged higher.

Rubber is a key raw material used for making tyres and accounts for almost half of the total tyre manufacturing cost. Rubber futures declined for a third day in Tokya on Tuesday, 15 March 2011, tumbling to the lowest level in more than four months, after Japan's strongest earthquake damaged car plants and caused electricity shortages, threatening the economic recovery.

Suzlon Energy fell 1.08% after the company's promoters sold 4 crore shares, or 2.25% of paid-up capital of the company on Monday, 14 March 2011. The announcement of stake sale by the company's promoters was made after market hours on Monday, 14 March 2011.

Tata Coffee clocked highest turnover of Rs 267.90 crore on BSE. Reliance Capital (Rs 226.82 crore), Reliance Industries (Rs 203.48 crore), Fineotex Chemical (Rs 134.48 crore), and Tata Steel (Rs 120.39 crore) were the other turnover toppers in that order.

Cals Refineries clocked highest volume of 1.02 crore shares on BSE. Fineotex Chemical (83.11 lakh shares), Reliance Communications (78.83 lakh shares), Acropetal Technologies (60.22 lakh shares) and Sudar Garments (58.31 lakh shares) were the other volume toppers in that order.

The Union Cabinet today, 15 March 2011, approved a bill to usher in a national goods and services tax (GST), the final step in the country's most ambitious tax reform before introducing it in parliament. The GST will cut business costs and boost government tax revenue, but will likely miss its April 2012 deadline for implementation due to resistance from several states and the Bharatiya Janata Party.

European markets dropped sharply on Tuesday as the panic gripping Japan in the wake of its catastrophic earthquake and tsunami hit world markets. The key benchmark indices in UK, Germany and France were down by between 2.47% to 4.53%.

In Japan, the Nikkei 225, settled 10.55% lower, having dropped more than 14% at one point in afternoon trading, after one more explosion was reported at Tokyo Electric Power Company's Fukushima Daiichi plant's No. 2 reactor, on top of previous explosions at No. 1 and No. 3 reactors. Japan said there was high risk of radiation leak from the facility, and residents near the facility were asked to stay indoors as substantial amounts of radiation are leaking in the area.

The worsening nuclear situation in Japan weighed across Asian stocks. The key benchmark indices in China, Hong Kong, South Korea, Singapore, Taiwan and Indonesia were down between 1.38% to 3.35%.

Trading in US index futures indicated that the Dow could tumble 269 points at the opening bell on Tuesday, 15 March 2011.

The US Federal Reserve is expected to stick to a bond-buying program meant to run through June and reiterate a pledge to maintain short-term interest rates close to zero amid continued high unemployment and low inflation when it meets Tuesday, 15 January 2011. Fed officials are likely to acknowledge that the US economy has continued to improve following their last meeting at the end of January 2011. The central bank officials could even discuss the unwinding of the huge stimulus pumped into the economy if the recovery firms further.