It was the worst day for Indian equity markets since the beginning
of this year. Investors chucked stocks to survive the snowballing
threat of a possible monetary tightening by Reserve Bank of India
to rein in soaring inflation.
The key benchmark indices plummeted over 3% to end at their lowest
level in 10 months after the latest data showed a surge in
inflation to 13-year high early this month. The market breadth was
extremely weak due to widespread selling. All the sectoral indices
on BSE ended in the red. Oil & gas and realty stocks declined
sharply.
The 30-share BSE Sensex slumped 516.70 points or 3.42% at
14,571.29, its lowest closing since late August 2007. The index
shed 568.72 points at the day's low of 14,519.27 hit at the fag end
of the trading session today. The Sensex gained 114.02 points at
the day's high of 15,202.01, hit at the onset of trading session.
The broader based S&P CNX Nifty was down 157.70 points or 3.48% at
4347.55, its lowest closing level since August 2007. Nifty June
2008 futures were at 4343, a discount of 4.55 points compared with
the spot closing. NSE's futures & options (F&O) segment turnover
was Rs 58533.66 crore, which was higher than Rs 42696.18 crore on
Thursday, 19 June 2008.
The Sensex is down 6635.48 points or 31.28% from a record high of
21206.77 it hit on 10 January 2008. It is down 5715.70 points or
28.17% in calendar year 2008 so far.
The market breadth was poor on BSE with 450 shares advancing as
compared to 2247 that declined. 43 remained unchanged.
The BSE Mid-Cap index outperformed the Sensex, falling 3.17% to
6,032.43. The BSE Small-Cap index underperformed the Sensex,
sliding 3.43% at 7,397.66.
India's second largest cellular service provider by sales Reliance
Communication (RCom) slipped 6.65% at Rs 491.30. South African
mobile giant MTN remained silent on its talks with the company at
its annual general meeting (AGM) in Johannesburg on Thursday, 19
June 2008. The AGM was expected to discuss RCom merger deal
especially in the back drop of the Reliance Industries' claims over
first right of refusal for a controlling stake in RCom.
India's largest aluminium producer by sales Hindalco Industries
slipped 6.37% at Rs 161 after its board approved raising up to Rs
5000 crore by way of a rights issue to redeem a bridge loan it had
taken for acquisition of Novelis Inc.
The other major losers from the Sensex pack were, Jaiprakash
Associates (down 6.03% at Rs 166.60), Reliance Infrastructure (down
4.92% at Rs 962.55), Bharti Airtel (down 4.76% at Rs 766.40) and
Tata Steel (down 4.66% at Rs 777.60).
India's top state-run oil explorer by market capitalisation ONGC
rose 1.56% at Rs 866.85. It was the only gainers from the Sensex
pack.
The BSE Oil & gas index underperformed the Sensex, sliding 5.03% to
9,419.89. Reliance Natural Resources (down 7.27% at Rs 82.95),
Essar Oil (down 6.62% at Rs 225.80), and Cairn India (down 5.69% at
Rs 267.60), slumped.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries lost 6.61% at Rs 2096.60. RIL has a
highest weightage of 15.80% in Sensex.
Stocks of the interest rate sensitive sectors such as automobiles,
realty and banking dropped after the inflation data. Bank of India
(down 7.36% at Rs 247.90), State Bank of India (down 4.11% at Rs
1,247.50), and HDFC Bank (down 1.93% at Rs 1,099), were the key
losers from the banking space. The BSE Bankex outperformed the
Sensex, falling 2.97% to 6,804.78.
India's largest private sector bank by assets ICICI Bank lost 2.48%
at Rs 734.65. ICICI Bank has a third highest weightage of 8.11% in
BSE Sensex.
The BSE Realty index underperformed the Sensex, falling 4.45% at
5,383.81. Housing Development & Infrastructure (down 9.17% at Rs
528.15), Sobha Developers (down 6.66% at Rs 360.95), Indiabulls
Real Estate (down 5.91% at Rs 354.05), Unitech (down 2.12% at Rs
184.60) and DLF (down 4.57% at Rs 456.35), tumbled.
Realty developer Parsvnath Developers lost 6.28% to Rs 152.10 after
the company reported 17% fall in net profit to Rs 108.87 crore in
Q4 March 2008 over Q4 March 2007.
Automobile sector stocks lost steam fearing that a tight monetary
policy may compel banks to raise lending rates which in turn would
hurt demand for automobiles. TVs Motor Company (down 5.19% at Rs
32.85), Hero Honda Motors (down 4.01% at Rs 759), Tata Motors (down
2.82% at Rs 488.85), Maruti Suzuki (down 2.51% at Rs 727.80) and
Mahindra & Mahindra (down 0.22% at Rs 575.20), declined.
India's second largest software exporter by sales Infosys
Technologies shed 1.74% at Rs 1827.60. Infosys has a second highest
weightage of 8.76% in BSE Sensex.
Sundaram Clayton, which resumed trading today on BSE, fell 57.92%
at Rs 282.55. It opened at Rs 324 and touched a high of Rs 397.80
in early trade.
Reliance Industries clocked the highest turnover of Rs 387.31 crore
on BSE. Anu's Laboratories (Rs 263.72 crore), Niraj Cement
Structurals (Rs 233.67 crore), Reliance Capital (Rs 233.25 crore)
and Reliance Petroleum (Rs 201.16 crore), were the other turnover
toppers on BSE in that order.
Reliance Natural Resources reported a highest volume of 1.32 crore
shares on BSE. IFCI (1.27 crore shares), Niraj Cement Structurals
(1.16 crore shares), Reliance Petroleum (1.15 crore shares) and
Chambal Fertilizers & Chemicals (1.07 crore shares), were the other
volume toppers on BSE in that order.
European markets were trading lower. Key indices in UK, Germany and
France were down by 1.07% to 1.43%. Some of the indices were
trading in positive terrain earlier.
Asian stocks were mixed today. The key benchmark indices in Hong
Kong, China and Singapore were up by between 0.31% to 3.01%. Key
benchmark indices in Japan, Taiwan and South Korea were down by
between 0.23% to 1.81%.
US stocks rose Thursday, 19 June 2008, as a drop in oil prices
fueled investor optimism about consumer spending, driving shares of
transportation and retailers sharply higher. The Dow Jones
Industrial Average gained 34.03 points or 0.28% to 12,063.09. The
tech-laden Nasdaq Composite Index rose 32.35 points or 1.33% to
2,462.06.
US crude for July delivery settled down $4.75, or 3.48%, at $131.93
per barrel on the New York Mercantile Exchange on Thursday. It lost
further to $131.71 today as China's surprise move to increase fuel
prices sparked worries about a curb in demand from the world's
second largest consumer.
The sharp fall in oil price came just days before an emergency
meeting on Sunday, 22 June 2008, in Saudi Arabia between oil
consumers and producers to discuss rising oil prices. Saudi Arabia,
the world's top oil exporter, is hiking output to help bring down
prices, which have jumped nearly 40% this year and caused protests
around the globe.
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