The market tumbled in a highly volatile trading session as an
unexpected increase in inflation shattered hopes of further
interest rate cuts by the Reserve Bank of India. Volatility in
index heavyweight Reliance Industries (RIL) caused volatility in
the key benchmark indices. Weak global markets also weighed on the
domestic bourses, as the BSE Sensex plunged 385.79 points or 3.81%
to 9,734.22. Most of the sectoral indices on BSE declined
Asian markets, which opened before Indian market, mirrored
overnight losses in the US as a fresh batch of dismal economic data
underscored the upbeat market mood from Democrat Barack Obama's
victory in the US presidential election. Hong Kong's Hang Seng was
down 7.7% and Japan's Nikkei plunged 6.5%. Key benchmark indices in
China, Singapore, South Korea and Taiwan ended down by 2.44% to
7.56%.
US stocks slumped on Wednesday, 5 November 2008. The Dow Jones
industrial average slid 486.01 points, or 5.05%, to 9,139.27. The
Standard & Poor's 500 Index plunged 52.98 points, or 5.27%, to
close at 952.77. The Nasdaq Composite Index lost 98.48 points, or
5.53% to 1,681.64.
Companies in the US cut an estimated 1,57,000 jobs in October 2008,
the most in almost six years, a private report based on payroll
data showed on Wednesday, 5 November 2008. Meanwhile, the Institute
for Supply Management said the US service sector contracted sharply
in October 2008.
The 30-share BSE Sensex fell 385.79 points or 3.81% to 9,734.22.
The index fell 484.79 points to 9,635.22 in afternoon trade. It
fell 10.56 points at day's high of 10,109.45 in mid-afternoon
trade.
The 50-unit S&P Nifty was down 102.30 points or 3.42% to 2892.65.
The BSE Mid-cap index was down 2.24% to 3,318.41, while the BSE
Small-cap index was down 2.13% to 3,880.27.
The market breadth was weak with 1633 shares losing and 869 stocks
gaining on BSE. A total of 83 stocks were unchanged.
BSE clocked a turnover of Rs 3841 crore as against Rs 4,983.72
crore on 5 November 2008.
Nifty November 2008 futures were at 2883.30, at a discount of 9.35
points as compared to spot closing of 2892.65. NSE's futures &
options (F&O) segment turnover was Rs 43836.07 crore, which was
higher than Rs 38550.94 crore on Wednesday, 5 November 2008.
The BSE Oil & Gas index underperformed the Sensex, falling 4.83%.
PSU OMCs fell on reports the government may cut petrol prices by
around Rs 2 a litre and diesel by Rs 1 per litre to drum up support
with voters ahead of key state elections later this month. BPCL,
HPCL and Indian Oil Corporation fell by 0.91% to 2.03%
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries extended losses for the second
session. The stock fell 7.71% even as the firm denied a newspaper
report that it had shut five polyester and petrochemical plants
near Mumbai amid falling demand. The stock had tumbled 12.76% in
the previous trading session hit by the media report.
Volatility in the stock was immense. The scrip declined 8.7% at the
day's low of Rs 1159 in late trade. The stock declined 2.3% at the
day's high of Rs 1240 in early trade. The stock had tumbled 12.76%
in the previous trading session hit by the media report about the
plant closure.
Oil exploration and offshore oil services firms fell on fall in
global crude oil prices. Cairn India, Aban Offshore, and Shiv Vani
Oil fell by 3.85% to 8.19%
India's largest state-run oil explorer by market capitalisation
ONGC fell 1.43% despite reports the French oil major Total is
picking up stakes in ONGC Mittal's Nigerian oil blocks.
Oil fell towards $65 a barrel on Thursday, 6 November 2008,
extending its 7% overnight drop caused by weak US economic data and
growing US fuel stockpiles.
State-run GAIL India rose 1.15% on reports it may be nominated as
the sole agency to sell natural gas from Reliance Industries'
eastern offshore KG-D6 block to fuel-starved fertilizer units.
Gains in sector bellwether DLF helped the BSE Realty index
outperformed the Sensex. The index rose 0.60%. DLF, India's biggest
realty developer by market capitalisation, rose 2.46% even as
Morgan Stanley cut price estimate on the stock by 82% to Rs 256.
Indiabulls Real Estate (up 3.13%) and Puravankara Projects (up
1.77%), were other gainers from the realty pack.
Stocks from the broader healthcare sector gained on defensive
buying. The BSE Healthcare index outperformed the Sensex, rising
0.28%. Ranbaxy Laboratories, Glenmark Pharmaceuticals, Dr Reddy's
Laboratories, Lupin, Apollo Hospitals, Glaxosmit Pharmaceuticals,
and Biocon rose between 0.04% to 3.72%.
Drug maker Sun Pharmaceuticals Industries rose 1.67% after the
company received US Food & Drug Administration approval to market
generic version of Sinemet in tablet form in multiple strengths.
Gains in index heavyweight Hindustan Unilever supported the BSE
FMCG index. The index outperformed the Sensex, falling merely
0.08%. Hindustan Unilever, which makes daily use products like
soaps and detergents, rose 3.05%. It has 29.06% weightage on the
BSE FMCG index.
Other FMCG stocks like ITC, United Spirits, Tata Tea, Nestle India,
Dabur India, GlaxoSmithkline Consumer Healthcare, United Breweries,
and Marico declined by 0.32% to 8.33%.
Heavy electrical equipments maker Bharat Heavy Electricals (Bhel)
helped the BSE Capital Goods index outpeforme the Sensex. The index
fell 1.02%. Bhel rose 0.52%. The stock has 23.49% weightage on the
BSE Capital Goods index. Suzlon Energy (up 2.74%), and Punj Lloyd
(up 2.34%), were the other gainers in the pack.
However, stocks like Larsen & Toubro, Crompton Greaves, Siemens,
ABB, Areva T&D and Thermax fell by 0.71% to 5.28%
The BSE Consumer Durables outperformed the Sensex, falling 1.90%.
This was on the back of strong gains in Gitanjali Gems and Rajesh
Exports, which rose 10.21% and 3.36% respectively. Meanwhile,
Videocon Industries, Titan Industries, Lloyd Electric and Blue Star
fell by 1.16% to 4.92%.
The BSE Power index outperformed the Sensex, falling 2%. GVK Power
& Infrastructure rose 9%. Power and allied projects developer GMR
Infrastructure rose 3.83% after the company said the group is
pursing possibility of acquiring a coal mine in Indonesia.
Meanwhile, Neyveli Lignite, Tata Power and Reliance Infrastructure
fell by 2.76% to 5.12%.
The BSE Auto index outperformed the Sensex, falling 2.92%. This was
despite the massive fall witnessed by Tata Motors.
Tata Motors, India's largest commercial vehicle maker by sales,
tumbled 12.17%, extending losses for the second session, as the
firm closed its commercial vehicle plant in Jamshedpur for three
days starting today to avoid a build-up of inventory. The stock
moved in the range of Rs 154.55 and Rs 175. The stock had declined
6.53% in the previous session, ahead of the announcement.
Commercial vehicles maker Ashok Leyland plunged 9.33% after the
company posted 50.2% fall in sales to 3397 units in October 2008
over October 2007.
Banking shares fell in volatile trade on higher inflation and on
comments by State Bank of India chief O.P. Bhatt that there is not
enough liquidity in the banking system. India's largest commercial
bank State Bank of India fell 4.58% after Bhatt said the bank will
announce a 75 basis point cut in its prime lending rate later
today.
India's largest private sector bank by market capitalisation ICICI
Bank fell 3.87%. HDFC Bank and Axis Bank fell 3.10% and 3.51%
respectively. The BSE Bankex outperformed the Sensex, falling
3.41%.
Shares of the software exporters fell as American depository
receipt (ADR) of Infosys Technologies, Wipro, and Satyam Computer
fell between 4.28% to 7.72% overnight. TCS, Infosys Technologies,
Wipro and Satyam Computer were down by 1.08% to 6.31%. The BSE IT
index underperformed the Sensex, falling 4.26%
World's largest steel maker, ArcelorMittal's poor earnings outlook
for the fourth quarter hit metal shares. World's sixth largest
steel maker Tata Steel fell 13.67%. JSW Steel, Steel Authority of
India, and Jindal Steel & Power, were down 6.02% to 10.80%.
ArcelorMittal, on Wednesday, 5 November 2008, reported
third-quarter net profit below expectations and forecast
significantly lower earnings in the fourth quarter. The company
also announced a series of measures, including more temporary
production cuts and a pause in its growth strategy, in response to
the economic slowdown.
India's largest aluminium maker by sales Hindalco Industries
slipped 7.50% on reports the company bought $2 billion from the
foreign exchange market to part-repay a $3.03 billion bridge loan
it took to buy Canadian aluminium can manufacturer, Novelis.
Sterlite Industries India, a leading producer of copper, tumbled
11.33% after parent Vedanta Resources reported 24.73% fall in net
profit to $350 million in the half year ended 2008 over the half
year ended 2007. The BSE Metal index underperformed the Sensex,
falling 8.41%
Reliance Industries clocked the highest turnover of Rs 391.47 crore
on BSE. Reliance Capital (Rs 202.90 crore), State Bank of India (Rs
173.15 crore), ICICI Bank (Rs 165.32 crore), and Alkali Metals (Rs
161.38 crore), were the other turnover toppers on BSE in that
order.
GVK Power & Infrastructure reported the highest volume of 3.30
crore shaes on BSE. Suzlon Energy (2.27 crore shares), Reliance
Natural Resources (1.39 crore shares), Unitech (1.21 crore shares),
and IFCI (1.16 crore shares), were the other volume toppers on BSE
in that order.
There has been a massive erosion in investors' wealth this year.
The barometer index BSE Sensex is down 10551.78 points or 52.01% in
the calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 11471.78 points or 54% below its all-time high
of 21,206.77 struck on 10 January 2008.
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