A brief recovery in mid-morning trade proved futile with the key
indices hitting day's low on frenzied selling in index pivotals,
with global cues playing the spoilsoprts. Metal, banking and IT
stocks were hammered brutally. The market breadth was dismal.
The opening volatility on the bourses followed the slump in Asian
markets to five-year lows, following the poor showing by the US
markets overnight on concerns of the looming US recession and
global economic slowdown decelerating corporate earnings growth.
Key benchmark indices in China, Hong Kong, South Korea, Taiwan, and
Japan slipped between 0.80% and 6.36% today, 27 October 2008.
At 12:29 IST, the BSE 30-share Sensex tumbled 664.78 points, or
7.53%, to 8,046.21. The Sensex opened 112.21 points lower at
8,588.86. The Sensex had lost 686.30 points to a three-year low of
8,014.77 in early afternoon trade. At the day's high of 8,739.48,
the Sensex had risen 38.41 points.
The S&P CNX Nifty lost 224.85 points, or 8.70%, to 2359.15, after
tanking to a three-year low of 2356.95.
The market breadth, indicating the overall health of the market,
was weak with 2,043 shares declining compared with just 294 that
rose. But 40 shares remained unchanged.
The total turnover on the BSE amounted to Rs 1420 crore by 12:30
IST compared with Rs 929 crore by 11:30 IST
The volatility is attributed to the expiry of the derivative
contracts for October 2008 series on Wednesday, 29 October 2008. As
per reports, marketwide rollover of positions was 37%, while that
of Nifty stood at 45% from the October 2008 series to November
2007, by Friday, 24 October 2008. The rollovers are fairly high,
indicating market players are uncertain about the direction of the
market.
Bhart Airtel was the lone gainer among the 30-member Sensex pack.
India's biggest listed cellular services provider gained 0.57% to
Rs 537.50. The stock moved in a range of Rs 552 and Rs 502.20 in
choppy trade.
Jaiprakash Associates (down 12.04% to Rs 52.40), Hindustan Unilever
(down 12.41% to Rs 197), and Reliance Communications (down 10.63%
to Rs 172.50) were the other key losers from the Sensex pack.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) fell 1.92% to Rs 996 in
volatile trade. It hit a 52-week low of Rs 980 in early trade.
RIL's net profit rose 7.4% to Rs 4122 crore on 39.8% growth in
sales to Rs 44787 crore in Q2 September 2008 over Q2 September
2007, the company said after market hours on Thursday, 23 October
2008.
Real estate shares, barring Unitech, continued their slide, with
the BSE Realty index declining 4.36% to 1,667.34. The BSE Realty
index has wiped off 87.59% from its record high of 13848.09 hit on
8 January 2008 on concern the global credit crunch would choke real
estate companies as borrowing costs rise and property prices
tumble.
DLF, holding the biggest weightage in BSE Realty index collapsed
12.90% to Rs 178. Indiabulls Real Estate (down 2.32% to Rs 94.60),
HDIL (down 12.57% to Rs 119.60), and Akruti City (down 6.64% to Rs
572) were not spared either.
Unitech, with third largest weightage in the BSE Realty index,
jumped 29.24% to Rs 38.90 after the company filed a complaint with
the market regulator against some brokers for hammering its shares
51% on 24 October 2008.
Metal shares slumped on fears a recession in the US will lead to
slowdown in demand. Tata Steel (down 9.09% to Rs 162), Nalco (down
21.75% to Rs 125.35), and Sterlite Industries (down 8.32% to Rs
191.30), and Hindalco Industries (down 9% to Rs 39.45) lead a 8.03%
decline to 4,041.04 in the BSE Metal index.
IT stocks fell despite the Indian rupee extending its losses to the
ninth day in a row today, easing 11 paise to 50.06 against the US
currency. IT firms derive a lion's share of their revenues from
exports to the US, and a declining rupee augurs well for them. But
many IT companies have taken forward cover for their foreign
exchange receipts in the belief the rupee would keep on
appreciating. Thus, the gains due to the rupee's depreciation would
be neutralised by hedging losses.
India's fourth largest IT exporter by sales Wipro tumbled 14.52% to
Rs 201 and was the top loser from the Sensex pack.
India's largest IT exporter by sales TCS fell 6.98% to Rs 456. TCS'
net profit fell 2.57% to Rs 1173.04 on a 9.36% rise in sales to Rs
5699.96 in Q2 September 2008 over Q1 June 2008. The company
announced the results on 23 October 2008.
India's third largest IT exporter by sales Satyam Computer Services
slipped 5.11% to Rs 272.20. The company raised its earnings
guidance in rupee terms at the time of announcing Q2 September 2008
results on Friday, 17 October 2008.
India's second largest IT exporter by sales Infosys was down 4.70%
to Rs 1190.
India's second largest power generation company in terms of net
profit Tata Power Company slumped 12.77% to Rs 545.10 ahead of its
Q2 results today, 27 October 2008.
Banking shares extended the losses of Friday, 24 October 2008 as
disappointed investors dumped banking shares after the central
bank's mid-term monetary policy review did not announce any
measures to boost liquidity.
On Friday, 24 October 2008, the Reseve Bank of India (RBI) kept all
the key rates unchanged even as it lowered its 2008-09 growth
forecast to 7.5% to 8% from a previous forecast of around 8%. The
RBI also left the cash reserve ratio, the amount of funds that
banks have to keep on deposit with it, unchanged at 6.5%.
India's second largest bank by market capitalisation HDFC Bank lost
7.98% to Rs 895. India's second largest private sector bank by
market capitalisation ICICI Bank slipped 4.65% to Rs 295.60 ahead
of its Q2 September 2008 results today, 27 October 2008. In the
midst of a credit turmoil gripping economies across the world,
marketmen will focus on ICICI Bank's result for its exposure to
some of the crisis-ridden institutions in the US including Lehman
Brothers Holdings Inc.
India's largest state-run bank by net profit State Bank of India
(SBI) fell 12.48% to Rs 1012.05 on muted growth in consolidated net
profit in Q2 September 2008. In its results declared before market
hours today, 27 October 2008, SBI reported a 10.60% rise in
consolidated net profit to Rs 2378.19 crore on a 26.4% increase in
total income to Rs 27083.47 crore in Q2 September 2008 over Q2
September 2007. The consolidated earnings include numbers from
recently acquired State Bank of Saurashtra.
Jet Airways (India) tumbled 13.16% to Rs 148.80 after reporting its
biggest quarterly loss in more than three years on soaring fuel
expenses. The company declared the results on 25 October 2008,
reporting a net loss of Rs 384.53 crore in Q2 September 2008 as
against a net profit of Rs 28.36 crore in Q2 September 2007. Sales
rose 71.6% to Rs 3121.34 crore in Q2 September 2008 over Q2
September 2007.
Brigade Enterprises tumbled 16.07% to Rs 38.40 despite seeing an
intra-day spike to Rs 45 with 20.26 lakh shares changing hands at
that level in a bulk deal on BSE at 11:31 IST.
PSU oil marketing companies HPCL (down 8.57% to Rs 173.35), BPCL
(down 11.51% to Rs 249.05), and IOC (down 7.26% to Rs 317) in a
weak overall market, despite the US light crude for December 2008
delivery sliding 22 cents to $63.93 a barrel today, 27 October
2008. It also touched a 17-month low of $63.67 as an emergency
production cut by OPEC was shrugged off by traders anxious about
the onset of a deep global recession.
India Inc.'s report card for the September 2008 quarter so far
shows a muted bottomline growth, partly due to a surge in interest
cost. Aggregate results of 875 companies showed a 6.2% rise in net
profit on 28.5% increase in net sales in Q2 September 2008 over Q2
September 2007. Interest cost jumped 35.6% in Q2 September 2008
over Q2 September 2007.
While governments and central banks across the globe are expected
to take further dramatic action to prop up the global financial
system this week, there is concern this would not be enough to
prevent companies from slashing production and jobs as sales get
hit and financing remains difficult.
Central banks are likely to launch new coordinated emergency action
this week to calm panic in financial markets. Reports indicate the
US Federal Reserve is widely expected to announce a 50 basis-point
cut in overnight rates on Wednesday, 29 October 2008 that would
take them to 1%, the lowest level since June 2004, with some
expecting an even deeper reduction to 0.75%.
The US markets had declined in volatile trade on Friday, 24 October
2008, as fears of a full-blown global recession intensified and
investors dumped risky assets. The Dow Jones Industrial Average
plunged 312.30 points, or 3.59%, to 8,378.95. The S&P 500 index
slipped 31.34 points, or 3.45%, to 876.77, and the Nasdaq Composite
index lost 51.88 points, or 3.23%, to 1,552.03.
Back home, markets suffered a severe setback on Friday 24 October
2008, plunging to three-year lows mirroring weak global equities on
worries about a sharp global economic slowdown and disappointment
from the second quarter monetary policy review of the Reserve Bank
of India. The BSE 30-share Sensex plunged 1070.63 points, or
10.96%, to 8,701.07, recording its biggest fall in percentage terms
since May 2004 and the S&P CNX Nifty was down 359.50 points or
12.2% to 2,584.
Foreign institutional investors (FIIs) were net sellers of equities
worth Rs 1431.56 crore, while the mutual funds bought more shares
than they sold at a net Rs 514.26 crore on Friday, 24 October 2008,
according to provisional data on the NSE.
No comments:
Post a Comment