Mounting political concern was the key culprit that haunted bourses
since second half of day's trading session, wiping-off steady early
gains. A late sell-off resulted in the benchmark index BSE Sensex
cracking below the physcological 16,000 mark, only to close
slightly above that level. However the S&P CNX Nifty shut shop
below 4,750 level. The market breadth was weak. Asian markets,
which opened before Indian markets were firm.
The market which was firm till early afternoon trade, witnessed a
sharp sell-off thereafter triggered by reports that the
Revolutionary Socialist Party (RSP), a member of the Left Front led
by the Communist Party of India-Marxist (CPM) was pulling out of
the United Progressive Alliance (UPA)-Left coordination committee.
Wary investors pressed sales over uncertainty that Left parties may
withdraw support to the government.
Weak European markets, slower manufacturing growth and widening
trade deficit, were the other demons that haunted the markets.
Shares from realty, metal and banking were axed brutally. However
auto stocks held firm throughout the day.
The 30-share BSE Sensex eroded a sharp 352.39 points or 2.15% to
16,063.18. The index climbed 217.15 points at day's high of
16,632.72, hit at the onset of trading session. Sensex lost 424.36
points at day's low of 15991.21.
The broader based S&P CNX Nifty declined 130.5 points or 2.68% to
shut shop at 4,739.60. Nifty has struck an intra-day high of
4,908.80 in opening trade. Nifty June 2008 futures were at 4696, a
sharp discount of 43.60 points as compared to spot closing of
4739.60.
The market breadth was weak on BSE with 600 shares advancing as
compared to 2066 stocks that declined. 50 stocks remained
unchanged.
The BSE Mid-Cap index declined 2.61% to 6,584.19 and BSE Small-Cap
index down 2.13% to 7,959.51.
Among the sectoral indices on BSE, the BSE Realty index (down 4% at
6,728.13), BSE PSU index (down 3.84% to 6,087.83), BSE Metal index
(down 3.66% to 16,295.26), BSE Power (down 3.66% to 2,828.74), BSE
Bankex (down 3.37% at 7,454.33), BSE Consumer Durables index (up
2.94% to 4,193.75), underperformed Sensex.
However the BSE Auto index (up 0.06% at 4,358.21), BSE FMCG index
(down 0.67% at 2,411.48), BSE Health Care index (down 1.04% at
4,350.42), BSE IT index (down 1.37% to 4,580.35), BSE TecK index
(down 1.48% to 3,561.57), BSE Oil & Gas index (down 1.83% to
10,206.71) BSE Capital Goods index (down 2.6% at 12,808.75)
outperformed Sensex.
BSE clocked a turnover of Rs 4,779 crore today compared to a
turnover of Rs 5514.14 crore on 30 May 2008.
The NSE futures & options (F&O) segment turnover was Rs 35,257.77
crore, which was slightly lower than Rs 35,883.79 crore on Friday,
30 May 2008.
Prime Minister Manmohan Singh reportedly said that the government
is left with no option but to hike the fuel prices in the wake of
soaring global crude oil prices. However government's move to hike
fuel price will face challenge from Left, and may propel inflation
above 10%.
On the other hand, if government does not hike prices, oil
marketing companies will go bankrupt, spoiling its report card.
As per petroleum minister's proposal, a hike of Rs 10 a litre in
petrol prices, Rs 5 per litre in diesel and Rs 50 per cylinder in
cooking fuel is to be considered to cut losses being incurred by
the state-run firms. But the Left parties had said they would
oppose any move to hike prices of transport and cooking fuels since
the average citizen was already burdened by high inflation.
Indian manufacturing activity slowed a fraction in May 2008 to its
lowest in 10 months, although output and new export orders rose,
but input and factory gate prices increased, a survey showed. The
ABN AMRO Bank purchasing managers' index (PMI) was a seasonally
adjusted 57.4 in May 2008 after 57.5 in April 2008, significantly
below its December 2007 reading of 61.9 which was the highest in
the survey's three-year history.
Meanwhile, trade deficit widened to $9.87 billion in April 2008 as
against $6.81 billion in April 2007. Exports grew to $14.4 billion
in April 2008-09, against $10.95 billion a year ago.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries declined 1.91% to Rs 2,355.70. It
came off from its high of Rs 2437.
Interest rate sensitives, realty and banking sectors suffered sharp
cut in today's trade. Indiabulls real Estate (down 1.86% to Rs
472.20), Unitech (down 6.47% to Rs 217.45) and DLF (down 3.37% to
Rs 567.65) edged lower from real estate sector.
Banking stocks declined on fears of further surge in inflation post
fuel price hike. HDFC Bank (down 3.78% to Rs 1,306.55), ICICI Bank
(down 2.97% to Rs 764.85) and State Bank of India (down 3.41% to Rs
1,394.10) edged lower.
Metal stocks declined after the Centre withdrew duty drawback
benefits on all iron & steel shipments. The move was aimed at
discouraging exports in the face of domestic inflationary
pressures. Tata Steel (down 3.86% to Rs 868.05), National Aluminium
Company (down 5.11% to Rs 506.60) and Hindalco Industries (down
5.05% to Rs 182.25), Steel Authority of India (down 3.54% to Rs
154) edged lower.
Power stocks declined on profit booing. Reliance Infrastructure
(down 4.9% to Rs 1,170.40), NTPC (down 6.39% to Rs 161.25), Power
Grid Corporation of India (down 4.11% to Rs 94.45), Reliance Power
(down 3.07% to Rs 228.60) and Tata Power Company (down 4.77% to Rs
1,292) declined.
However auto stocks held gains after posting rise in May 2008
monthly sales. Bajaj Auto rose 0.27% to Rs 576 after posting 7.57%
rise in motorcycle sales to 179,649 units in May 2008 over May
2007.The sale of total two wheelers rose 6.86% to 180,935 units, in
May 2008 over May 2007. The total two and three wheeler sale rose
by 4.17% to 201,511 units in May 2008 over May 2007.
India's largest motorcycle maker by sales Hero Honda Motors rose
5.6% to Rs 788.55. It reported a 9.54 % rise in its motorcycle
sales in May 2008 at 3,12,317 units as compared with 2,85,109 units
in May 2007.
India's largest car maker by sales Maruti Suzuki India rose 2.94%
to Rs 787. The company's total vehilcle sales rose 16% to 69,001
units in May 2008 over May 2007. Mahindra & Mahindra (up 0.76% to
Rs 597.05) edged higher. However Tata Motors declined 0.85% to Rs
572.
ITC (up 1.01% to Rs 219.85) and Bharti Airtel (up 0.14% to Rs
877.70) edged higher.
ACC (down 5.23% to Rs 626.10), Bharat Heavy Electricals (down4% to
Rs 1595.65), Reliance Communications (down 3.78% to Rs 555.35),
Ambuja Cements (down 3.1% to Rs 92.25), Ranbaxy Laboratories (down
2.76% to Rs 514.05), Wipro (down 2.51% to Rs 495.25 edged lower.
IFCI clocked the highest volume of 1.84 crore shares on BSE. Ispat
Industries (1.6 crore shares), Spice Communications (1.17 crore
shares), Chambal Fertilizers and Chemicals (1.14 crore shares) and
Reliance Natural Resources (94.69 lakh shares) are other volume
toppers in that order.
Essar Oil clocked the highest turnover of Rs 183.42 crore on BSE.
Reliance Capital (Rs 180.98 crore), Reliance Industries (Rs 173.06
crore), GSS America Infotech (Rs 142.8 crore) and Reliance
Petroleum (Rs 142.36 crore) are among other turnover toppers in
that order.
Among the side counters, private sector oil refiner Essar Oil
soared 5.61% to Rs 236.20. The company is reportedly mulling upto
$5 billion fresh debt to fund its $6 billion refinery capacity
expansion programme at Vadinar, Gujarat and for acquisition of oil
and gas blocks.
India's largest drug maker by market capitalisation Sun
Pharmaceuticals jumped 3.13% to Rs 1,446.80. The company reported
59.2% surge in net profit to Rs 247.89 crore on 32.1% rise in net
sales to Rs 780.74 crore in Q4 March 2008 over Q4 March 2007. The
company announced the results after trading hours on Friday, 30 May
2008.
Monsanto India plunged 14.12% to Rs 1653.10 after the company's
shares started trading at Rs 180 per share ex-dividend from today,
2 June 2008.
Sesa Goa slumped 7.94% to Rs 3,946.25 after reports that the
government has imposed 15% export duty on iron ore.
Zandu Pharmaceuticals Works galloped 19.54% to Rs 9,714.90 after
Emami raised its stake in the company to 27.51% for an undisclosed
amount.
Punj Lloyd plunged 10.53% to Rs 287.05 despite reporting 459.6%
surge in net profit to Rs 129.71 crore on 87.8% rise in net sales
to Rs 1499.40 crore in Q4 March 2008 over Q4 March 2007.
Sterlite Industries India declined 1.95% to Rs 916.70 after the
company agreed to buy assets of USA's third largest copper producer
Asarco for $2.6 billion in cash.
European markets, which opened after Indian market, were trading
weak. Key benchmark indices in France, Germany and UK were down by
between 1.1% to 1.36%.
Most of the Asian markets settled higher today, 2 June 2008. Hong
Kong's Hang Seng, Taiwan Weighted, Singapore's Straits Times and
Japan's Nikkei, China's Shanghai Composite were up by between 0.34%
to 1.22%.
However South Korea's Seoul Composite declined 0.24% at 1,847.99.
US markets closed mixed on Friday, 30 May 2008. Dell earnings were
better than expectations and rebound in oil price led technology
and energy shares higher. The Dow Jones industrial average fell 7.9
points to 12,638.32. However the technology-led Nasdaq Composite
index gained 14.34 points to 2, 522.66.
U.S. light, sweet crude oil futures dipped 14 cents to $127.21 a
barrel today, 2 June 2008 as traders took profits tracking the
dollar for direction.
India's GDP grew a strong 8.8% in Q4 March 2008 from a year
earlier, led by strong expansion in the services sector, data
released by the government on Friday, 30 May 2008 showed. The Q4
annual GDP growth matched an upwardly revised 8.8% growth in Q3
December 2007. The GDP growth was 9% in FY 2008 (year ended March
2008). The government had earlier estimated annual growth of 8.7%
in FY 2008.
India's inflation based on the wholesale price index rose 8.1% in
12 months to 17 May 2008, the highest reading in more than 3-½
years and above the previous week's annual rise of 7.82%,
government data released on Friday, 30 May 2008, showed. Inflation
for the week ended 22 March 2008 was revised upwards to 7.85% from
7%.
Liberalisation of imports, banning exports and a cut in excise and
customs duties are some of the many steps initiated by the United
Progressive Alliance (UPA) government to control inflation in the
country, Finance Minister P Chidambaram said on 1 June 2008.
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