Sensex below 12,000

Key benchmark indices slipped deep into red in early afternoon
trade after trading resumed at 12:10 IST after 45-minutes stoppage
due to sun outage. The 30-share BSE Sensex fell below 12,000 mark
and lost close to 575 points at day's low. Many Asian markets were
down more than 4% each. The Sensex hit its lowest level in more
than two years while the S&P CNX Nifty hit 1-½ year low.




Power and realty stocks plummeted. Jaiprakash Associates lost more
than 12%. Tata Power Company and Sterlite Industries fell more than
10% each. Reliance Industries (RIL) hit 52-week low. The market
breadth was weak as selling was witnessed across the board.

The financial crisis spread further to Europe and doubts persisted
about the effectiveness of the US administration's $700 billion US
financial sector bailout plan. The uncertainty over the nuclear
deal with the United States persisted as Condoleezza Rice, US
secretary of state, left New Delhi at the weekend without signing
the US-India nuclear deal. The domestic bourses also ignored
reports that the market regulator Securities & Exchange Board of
India (Sebi) may relax norms of participatory notes. The market
also ignored fall in inflation and further fall in oil & commodity
prices.

At 12:29 IST, the BSE 30-share Sensex was down 533.15 points or
4.26% to 11,991.42. The index shed 572.23 points at the day's low
of 11,954.09, hit in early-afternoon trade, its lowest level since
20 September 2006. The Sensex fell 241.83 points at day's high of
12,284.49, in early trade.

The S&P CNX Nifty was down 139.40 points or 4.36% to 3,651.95.
Nifty hit a low of 3,643.85, its lowest level since 3 April 2007.

The BSE Mid-Cap index was down 4.91% at 4,448.31 and the BSE
Small-Cap index was down 4.24% at 5,233.64.




The market breadth was weak on BSE with 289 shares advancing as
compared to 1,961 that declined. 38 shares remained unchanged.

India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 3.63% to Rs 1,697. The stock
hit a 52-week low of Rs 1,692.95. The promoters of Reliance
Industries converted their 12 crore warrants into an equal number
of shares. Post-transaction, the promoter group holds 49% stake in
the company, with 52% voting rights. This involves an infusion of
around Rs 15,142 crore into the company. The shares have a lock-in
period of three years.

Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.

Agro Tech Foods (down 14.77% to Rs 90), XL Telecom (down 13.6% to
Rs 110.50), Satra Properties (down 13.13% to Rs 50.95), Religare
Technova (down 12.92% to Rs 49.20), (down 12.92% to Rs 49.20), were
top losers from small-cap space.

Spice Communicatons (down 15.86% to Rs 55.70), Monnet Ispat (down
15.46% to Rs 358), Phoenix Mills (down 13.34% to Rs 119.90), GVK
Power Infrastructure (down 13.22% to Rs 20.35) were top losers from
mid-cap space.

Power stocks fell. Tata Power Company (down 11.65% to Rs 765),
Reliance Infrastructure (down 7.48% to Rs 685.50), Reliance Power
(down 5.45% to Rs 141.30), NTPC (down 2.5% to Rs 167.40), PowerGrid
Corporation of India (down 2.34% to Rs 87.50), edged lower.




Realty stocks declined. Indiabulls Real Estate (down 5.44% to Rs
152), Unitech (down 9.05% to Rs 102) and DLF (down 9.04% to Rs 306)
edged lower.

Jaiprakash Associates (down 12.32% to Rs 101.80), Sterlite
Industries (down 10.31% to Rs 353.50), Tata Steel (down 8.84% to Rs
359.10), Reliance Communications (down 8.91% to Rs 302.95), edged
lower from the Sensex pack.

India's largest electric equipment maker by sales Bharat Heavy
Electricals declined 7.13% to Rs 1,455. Bharat Heavy Electricals
and Nuclear Power Corporation of India are reportedly in talks with
foreign firms Siemens, Alstom and GE for a third partner in their
planned joint venture to set up nuclear power projects in India.

Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 4.1%
to 4.25%.

Germany gave blanket bank deposit guarantee on Sunday, 5 October
2008, to prevent panic as officials clinched deals to rescue
Germany's Hypo Real Estate -- after an initial bailout failed --
and recapitalize two other European banks.

US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.




The market regulator ----Securities & Exchange Board of India
(Sebi)----- is expected to review restrictions on issue of
participatory notes (P-Notes) at a board meeting today, 6 October
2008. Reports suggest that--- Sebi---- may ease restrictions on
P-Notes. However, the Reserve ---bank--- of India has always been
against allowing investments through P- Notes. P-Notes are
derivative instruments issued by foreign institutional investors
(FIIs) to other overseas investors seeking to invest in Indian
securities, but are not registered with the stock market
regulator---- Securities & Exchange Board of India (Sebi)-----
either out of choice or regulatory issues.

With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.




The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.