Sensex down 400 points

The key benchmark indices extended losses in mid-afternoon trade as
trading in US index futures suggested the Dow would fall 143 points
at the opening bell. The BSE Sensex tumbled more than 400 points or
3.88% at day's low. The market had witnessed bout of volatility
earlier in the day. An initial surge boosted by reports government
was considering several measures to raise domestic institutional
participation in the equities, proved short-lived.

Realty and power stocks nosedived. Index heavyweight Reliance
Industries (RIL) dipped more than 3.5%. Reliance Infrastructure,
Reliance Communications and Jaiprakash Assoociates fell more than
8.5% each. ICICI Bank fell close to 8%. However, BSE Mid-Cap and
Small-cap indices outperformed the Sensex.

The government has reportedly sought data from the Reserve Bank of
India to consider a proposal to enhance the investment limit for
bank exposure to equity markets. This will be part of several
measures to boost domestic institutional participation in the
markets at a time when foreign institutional investors (FIIs) are
exiting. At present, a bank can invest up to 20% of net worth in a
single company and up to 40% of net worth in a group.

The domestic markets have declined sharply in the past few days
despite Reserve Bank of India' several attempts to infuse liquidity
in at a time when global recession worries have marred investor
sentiment.

Asian markets were mostly lower as worries about a slowing global
economy kept investors on the sidelines.

At 14:22 IST, the BSE 30-share Sensex was down 410.65 points or
3.88% to 10,173.81. The index fell 414.98 points at the day's low
of 10,166.51 in mid-afternoon trade. The Sensex rose 205.44 points
at day's high of 10,786.93, at the onset of the trading session.

The S&P CNX Nifty was down 132.05 points or 4.04% to 3,137.25.

The BSE Mid-Cap index was down 1.69% at 3,595.32 and The BSE
Small-Cap index was down 1.21% at 4,234.70. Both the indices
outperformed the Sensex.

The market breadth was weak. On BSE, 905 shares advanced as
compared to 1,571 that declined. 64 shares remained unchanged.

India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 3.67% to Rs 1,345 off day's
high of Rs 1,438. The Bombay High Court on Thursday, 16 October
2008, questioned the government about its locus standi in the legal
tussle between Reliance Industries and Reliance Natural Resources
over supply of gas from the former's Krishna Godavari basin to the
latter's proposed power plant at Dadri in Uttar Pradesh. This came
after the government sought to be a party to the case. The
government counsel will present his case on Friday, 17October 2008.

Reliance Infrastructure (down 8.58% to Rs 507.25), Reliance
Communications (down 8.85% to Rs 236.25), Jaiprakash Associates
(down 8.09% to Rs 68.75) were the major losers from the Sensex
pack.

Realty stocks slumped in mid-afternoon trade despite possibility of
home loan rate cuts by lenders due to fall in inflation and cut in
the cash reserve ratio cut by Reserve Bank of India three times in
last ten days. BSE Realty index fell 6.17% and was the major loser
from the sectoral indices on BSE. Realty majors, Indiabulls Real
Estate, DLF and Unitech fell between 6.73% to 9.72%. Housing
Development & Infrastructure, bucked the trend, surging 6.47%. Fall
in lending rates may spur demand for residential properties.

Power stocks dropped, with the BSE Power index falling 5.54%. It
was the second major loser from the sectoral indices. All the
stocks from the index were in red. NTPC, Reliance Infrastructure,
Tata Power Company Power Grid Corporation of India and Reliance
Power slip between 1.29% to 7.25%.

Metal stocks fell on falling metal prices on mounting fears a
global economic slowdown will hit demand. Hindalco Industries,
Sterlite Industries, Hindustan Zinc, National Aluminum Company),
Steel Authority of India fell between 1.22% to 9.08%.

India's largest steel maker by sales Tata Steel fell 3% after its
UK unit Corus decided to cut crude steel production by up to 20% or
1 million tonnes over the next three months due to slowing demand
caused by the global financial crises. There would be no material
change in production for its operations outside Europe, Tata Steel
said.

Major lenders slipped further in red despite India's second largest
private sector bank by net profit, HDFC Bank's robust Q2 results.
HDFC Bank fell 1.42% to Rs 1072.05 even as it reported 43.2% rise
in net profit to Rs 527.98 crore on 62.8% growth in total income to
Rs 4,634.32 crore in Q2 September 2008 over Q2 September 2007. The
stock had fallen 4.15% yesterday, 16 October 2008, ahead of the
results which hit the market after trading hours.

Other banking majors extended fell. ICICI Bank and State Bank of
India fell between 4.2% to 7.92%.

India's largest home loan lender by sales HDFC fell 0.9% even as it
reported 32.5% growth in net profit to Rs 534 crore in Q2 September
2008 over Q2 September 2007. The results hit the market during
trading hours

India's third largest IT services provider by sales Satyam Computer
Services fell 1.3% to Rs 270.25, off day's high of Rs 185. The
stock had held firm for a better part of the trading sessions after
the company raised its earnings per share forecast in rupee terms
for year ending March 2009 at the time of announcing Q2 September
2008 results today.

European markets which opened after Indian markets were strong.
France's CAC 40, Germany's DAX and UK's FTSE 100 rose between 2.38%
to 3.85%.

Asian markets were mostly lower. South Korea's Seoul Composite,
Singapore's Straits Times, and Taiwan's Taiwan Weighted, Hong
Kong's Hang Seng, fell between 1.52% to 2.73%. China's Shanghai
Composite index and Japan's Nikkei, rose between 1.08% to 2.78%.

US markets staged a comeback in a late-day rally in highly volatile
trade on Thursday, 16 October 2008, as investors snapped up
beaten-down shares a day after Wall Street's worst day since the
1987 crash. The Dow Industrials surged 401.35 points, or 4.68%, to
8,979.26. The S&P 500 index advanced 38.59 points, or 4.25%, to
946.43, and the Nasdaq composite index added 89.38 points, or
5.49%, to 1,717.71.