Index heavyweights Reliance Industries, ICICI Bank and Infosys came
off from their lows pulling the key benchmark indices sharply off
the lower level in mid-afternoon trade. The BSE 30-share Sensex was
down 547.71 points, having recovered 540.79 points from the day's
low. Data showing lower inflation aided recovery. European markets
also recovered from sharp slump in early trade, helping the
recovery on the domestic bourses.
Weak industrial production data for August 2008 added to the gloom
on the bourses already hit by global equities sell-off caused by
global recession worries when the Sensex had tanked about 1000
points in early afternoon trade. A global sell-off in equities on
the worries about a global recession created havoc on the domestic
bourses at the onset of the trading session.
Banking stocks recovered from lows on lower inflation data.
Consumer durables stocks declined.
Securities & Exchange Board of India (Sebi) chief C B Bhave today
said there was no unusual activity in the stock market. He further
said there has been no shorting by institutions in cash markets.
Inflation based on the whole price index rose 11.8% in 12-months to
27 September 2008, lower than previous week's 11.99% rise.
European markets which opened after Indian market were lower.
France's CAC 40, Germany's DAX and UK's FTSE 100 were down between
4.78% to 6.76% .
Stocks fell across the globe despite worldwide central bank
measures to stave off a crisis. Bank bailouts, liquidity injections
and interest rate cuts across the world have failed to quell
investor anxiety with Asian stocks tumbling today, following
overnight setback in US stocks.
Back home, the Reserve Bank of India (RBI) toady cut the cash
Reserve Ratio (CRR) second time in the week. The central bank cut
CRR by 100 basis points after 50 basis point cut earlier in the
week.
Trading in US index futures suggested the Dow would fall 187 points
at the opening bell.
The Indonesian stock exchange suspended trading for a third day,
and exchanges in Bangkok and Vienna halted trading after shares
fell more than 10 %, triggering circuit-breaker rules.
In Moscow, the Russian Duma, or Parliament, approved a financial
sector bailout package valued at more than $80 billion. Trading on
Russian stock exchanges was suspended until further notice.
At 14:31 IST, the BSE 30-share Sensex was down 547.71 points or
4.89% to 10,774.46. The index plunged 1,088.50 points at the day's
low of 10,239.76 at the onset of the trading session, its lowest
level since 24 July 2006. The Sensex fell 424.33 points at day's
high of 10,904.13, in early trade.
The S&P CNX Nifty was down 157 points or 4.47% to 3,356.65. Nifty
hit a low of 3,198.95, its lowest level since 9 August 2006.
The BSE Mid-Cap index was down 8.17% at 3,682.95. The BSE Small-Cap
index was down 7.03% at 4,368.61. Both the indices underperformed
Sensex.
The market breadth was extremely weak. On BSE, 297 shares advanced
as compared to 2,213 that declined. 39 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries slumped 4.76% to Rs 1,571.10. The
stock recovered from the session's low of Rs 1,480.
Consumer durables stocks declined. Videocon Industries, Lloyd
Electric and Asian Star Company slumped between 11.25% to 12.67%.
Some banking shares recovered from lows on fall in inflation.
India's biggest private sector bank by market ICICI Bank lost
14.91% to Rs 385.50. The stock came off session's low of Rs 326.70.
India's second-largest bank, has very small exposure to the global
financial crisis and there should be no concerns about liquidity,
its joint managing director Chanda Kochhar said. Her comments came
after the bank's stock fell as much as 28% today as panic-stricken
investors dumped the shares in a weak market.
India's second biggest private sector bank by market capitalisation
HDFC Bank was down 5.58% at Rs 1,044, off the session's low of Rs
975.55.
India's largest state-run lender by market capitalisation State
Bank of India rose 1.65% to Rs 1,344, off a low of Rs 1181.15.
Capital goods declined on weak industrial production figures.
India's largest engineering and construction firm by sales Larsen
and Toubro fell 7.83% to Rs 891. International majors such as
Philips, General Electric (GE) and Siemens are reportedly in the
race for acquiring the medical equipment business of Larsen and
Toubro. Suzlon Energy and Bharat Heavy Electricals slumped between
14.75% to 5.97% .
IT stocks recovered after earlier fall on Infosys's weak outlook.
India's second largest IT exporter by sales Infosys rose 0.05% to
Rs 1,255. The stock recovered from the session's low of Rs 1,040.
Infosys said it has revised the US dollar guidance downwards to
reflect the current economic situation and the drastic depreciation
of major global currencies against the US dollar. Infosys expects
earnings per American depository share at $2.23 for the year ending
March 2009, a growth of 12.6%. At the time of Q1 June 2008 results,
the company had forecast earnings per American depository share at
$2.31 to $2.35 for the year ending March 2009, a growth of 16.7% to
18.7%.
Infosys consolidated net profit rose 9.9% to Rs 1432 crore on 11.6%
growth in sales to Rs 5418 crore in Q2 September 2008 over Q1 June
2008. The company announced the results before trading hours today,
10 October 2008.
Tata Consultancy Services, Wipro and Satyam Computer Services
tumbled between 3.22% to 5.18%.
The Indian rupee fell to a record low past 49.07 per dollar today
as the spreading global financial crisis hurt sentiment in Asian
stock markets, leading to concerns of a large outflow of foreign
funds from India. IT exporters benefit from the weaker rupee as
they derive most of their revenues in dollars.
Metal Stocks slumped as metal prices fell on global recession
worries. Sterlite Industries, Hindustan Zinc ,National Aluminum
Company, Steel Authority of India fell between 2.19% to 4.64%.
India's largest steel maker by sales Tata Steel slumped 10.65% to
Rs 301.50. ArcelorMittal SA and Tata Steel have reportedly shown
interest in mining coal in collaboration with Coal India from the
latter's 18 abandoned underground mines.
India's largest aluminum maker by sales Hindalco Industries slumped
6.33% to Rs 85.05 even as the company said IGH Holdings, a promoter
of the company has acquired 8.94 lakh shares or 0.05% of equity
capital of the company by way of open markets purchases.
Among the major sensex losers were, Jaiprakash Associates (down
11.65% to Rs 80.40), Reliance Infrastructure (down 13.52% to Rs
550) and Reliance Communications (down 13.91% to Rs 258.80
Tata Power Company declined 3.18% to Rs 770. The company is
reportedly exploring the option of raising its stake in Indonesia's
Bumi Resources Tbk, the world's second largest coal company, after
a sharp erosion in the value of the shares pledged by Bumi's parent
firm, Bakrie & Brothers, with various lenders.
Era Infra Engineering slipped 4.85% to Rs 77.50 even as the company
said its joint venture company has bagged a contract from Airport
Authority of India for construction of a new terminal at Devi
Ahilya Bai Holkar Airport, Indore
Aurobindo Pharma declined 9.41% to Rs 191.10, even as the company
said it has received US Food & Drug Administration approval to
manufacture and market Cyclobenzaprine hydrochloride tablets in
multiple strengths.
India's industrial production rose at a dismal 1.3% in August 2008
compared to a 10.9% growth in August 2007. Manufacturing grew a
poor 1.1% in August 2008 versus 10.7% growth in August 2007.
Consumer durables production rose 5.1% in August 2008 verses 6.2%
growth in August 2007. Capital goods prodcution rose 2.3% in August
2008 verses 14.7% growth in August 2007. Meanwhile, industrial
production growth for July 2008 was revised upwards to 7.4% from
7.1%.
Overnight, US stocks slumped more than 7% on fears that credit
markets would stay frozen, paralysing the world's financial system
and slowing economies to a standstill.
US light crude for November delivery fell $4.16, or 4.8%, to $82.43
a barrel today, 10 October 2008, just above its earlier low of
$82.00, in its biggest two-week decline since the start of the Iraq
war in 2003. Oil slipped on fears that market turmoil will send
demand for fuel slumping.
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