Market snaps 7-week rally on profit booking

The market tumbled last week, snapping a seven-week rally, as investors booked profits as concerns mounted over rising crude oil prices.

The Sensex fell 365.78 points or 2% to 17,923.57 in the week ended 24 February 2012. The S&P CNX Nifty fell 135 points or 2.43% to 5,429.30.

The BSE Mid-Cap index tumbled 3.74% and BSE Small-Cap index slipped 3.65%. Both these indices underperformed the Sensex.

Higher oil prices spoiled investor sentiment. India imports about 80% of its total oil consumption and the rise in prices could worsen a widening trade deficit. Oil advanced for the seventh day in a row on Friday, 24 February 2011, the longest winning streak since January 2010, on signs of economic recovery from the US to Germany and concern escalating tension with Iran threatens crude supplies. Nymex crude oil for April delivery hovered at $108.31 a barrel in Asian electronic trading on Friday, 24 February 2012.



Inflows from foreign institutional investors (FIIs) remained positive despite the broad based selling in Indian shares. FIIs bought shares worth a net Rs 104.55 crore on Thursday, 23 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 14483.61 crore in this month so far (23 February 2012), as per provisional data from the stock exchanges. The inflow this month comes on the top of heavy purchases last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).

The primary market saw revival after a long time with initial public offer (IPO) of Multi Commodity Exchange of India (MCX) receiving an overwhelming response. MCX's IPO was subscribed by a massive 52.75 times by 16:00 IST on the last day of bidding for the IPO on Friday, 24 February 2012. The company raised Rs 95.62 crore from 12 anchor investors on Tuesday, 21 February 2012.

The stock market was closed on Monday, 20 February 2012, on account of Mahashivratri. Trading for the week began on a strong note on Tuesday, 21 February 2012, when key benchmark indices edged higher for the second straight day. The BSE Sensex jumped 139.26 points or 0.76% to settle at 18,428.61. The S&P CNX Nifty surged 42.85 points or 0.77% to settle at 5,607.15.

Key benchmark indices edged lower on Wednesday, 22 February 2012, as weakness in European stocks triggered profit booking on the domestic bourses after recent strong rally in share prices. The BSE Sensex lost 283.36 points or 1.54% to settle at 18,145.25. The S&P CNX Nifty lost 101.80 points or 1.82% to settle at 5,505.35.

Key benchmark indices fell for the second straight day on Thursday, 23 February 2012. Volatility was high as traders rolled over positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. The February 2012 F&O contracts expired on Thursday, 23 February 2012. The BSE Sensex shed 66.75 points or 0.37% to settle at 18,078.50. The S&P CNX Nifty shed 22.05 points or 0.4% to settle at 5,483.30.

Key benchmark indices fell for the third straight day to hit their lowest level in 1-1/2 weeks on Friday, 24 February 2012. The BSE Sensex was down 154.93 points or 0.86% to 17,923.57. The S&P CNX Nifty was down 54 points or 0.98% to 5,429.30.

Among the 30 Sensex shares, 22 declined, one stock was unchanged and seven stocks rose.

India's largest copper maker by sales Sterlite Industries (India) slumped 10.79% to Rs 118.65. As per media reports, the Vedanta Resources group may merge iron ore firm Sesa Goa with copper and aluminium maker Sterlite Industries to simplify and consolidate its corporate structure.

India's largest real estate developer by market capitalisation DLF tumbled 10.62% to Rs 226.90 on profit booking after recent strong gains.

State Bank of India fell 8.69% to Rs 2,206.80. The bank said after market hours on Thursday, 23 February 2012, that based on the floor price of Rs 2,191.69 per share determined on the relevant date of 17 February 2012, the Executive Committee of Central Board (ECCB) of the bank at its meeting held on 23 February 2012 has fixed the issue price at Rs 2,191.69 for the preferential allotment of equity shares to Government of India (GoI). It may be recalled that the ECCB of the bank at its meeting held on 31 January 2012, had accorded its approval to increase the issued capital of the bank by way of preferential allotment of equity shares to GoI aggregating to the extent of approximately Rs 7900 crore.

Housing finance major HDFC fell 5.62% to Rs 676.20. Citigroup Inc. sold 14.53 crore shares, or its entire 9.85% stake, in HDFC via block deals executed on NSE at the onset of the trading session on Friday, 24 February 2012. The HDFC sale marks the culmination of Citigroup's seven-year investment in India's largest mortgage lender by assets.

India's largest listed telecom operator by sales Bharti Airtel fell 2.07% to Rs 342.30. Bharti Airtel reportedly said that no suit has been filed against it by South Africa-based Econet Wireless to seek $3.1 billion as damages. Econet Wireless reportedly stated that as presently advised by its financial consultants, the claim for damages and equitable compensation might be in excess of $3 billion bearing in mind that Celtel paid over $1 billion to acquire Airtel Nigeria (ANL).

Index heavyweight Reliance Industries (RIL) inched up 0.30% to Rs 820.35. RIL at the fag end of the trading session on Friday, 24 February 2012, announced that its wholly-owned subsidiary Reliance Holding USA, Inc. priced a $500 million reopening of its existing 5.4% Guaranteed Senior Notes due 2022. The additional notes will be consolidated and form a single series with the $1,000 million 5.4% Guaranteed Senior Notes due 2022 and will be fully and unconditionally guaranteed by RIL.

The transaction was approximately 7.5 times over-subscribed with an order book aggregating $3.73 billion from high quality investor accounts, RIL said in a statement. RIL said the additional notes were priced at 325 basis points over the 10-year US Treasury Note, at a price of 101.018% to yield 5.267%. The additional notes will bear fixed interest of 5.4% per annum, with interest payable semi-annually in arrears. Reliance Holding USA, Inc. will apply the net proceeds to fund its ongoing capital expenditure, to make business investments, to refinance its existing debt and for general corporate purposes.

India's largest state-run power equipment maker by sales Bhel rose 0.18% to Rs 304. According to reports, the cabinet is likely to approve a proposal to impose a 19% duty on imports of power generation equipment to help local manufacturers compete for orders with Chinese rivals.

Drug maker Sun Pharmaceutical Industries rose 1.02% at Rs 547.45. The US drug regulator reached a limited, temporary arrangement to import Lipodox from the company and its distribution subsidiary, Caraco Pharmaceutical Laboratories. Lipodox is a generic of Johnson & Johnson's cancer drug Doxil. According to reports, Doxil has been in short supply since about mid-2011. Caraco, a generic-drug maker based in Detroit, will temporarily import the drug Lipodox from its India-based parent, Sun Pharmaceutical Industries, the FDA said.

India's largest state-run oil explorer by sales ONGC rose 1.05% to Rs 284.25. Last week, a ministerial panel approved auctioning a 5% stake in the state-run explorer.

India's largest software services exporter by revenue TCS rose 3.29% to Rs 1269.15. The stock hit a record high of Rs 1,279.20 in intraday trade on Friday, 24 February 2012. The Ministry of External Affairs (MEA), the Government of India in partnership with TCS on Thursday, 23 February 2012, announced the launch of citizen-centric Passport Seva Kendras for applications and issuance of passports in the National Capital Territory.