The key benchmark indices suffered losses for the fourth straight day on unabated selling pressure in blue-chip stocks. This was despite a firm start triggered by a sharp fall in crude oil prices yesterday, 15 July 2008. Both the barometer indices BSE Sensex and S&P CNX Nifty registered fresh 15-month low. Volatility was the hallmark of todays trade. The market breadth was weak. Real estate stocks crashed. Ranbaxy Labs was the star of the day, galloping over 15% on high volumes.
Global cues were mixed. European markets, which opened after Indian market, slipped after firm start. Asian markets, which opened before Indian market, were mixed.
Crude oil prices declined sharply on Tuesday, 15 July 2008. On the New York Mercantile Exchange, August crude settled down $6.44, or 4.44%, at $138.74 a barrel yesterday, 15 July 2008.
Political uncertainty will continue to weight on the Indian market in the near term. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.
The 30-share BSE Sensex was down 100.39 points or 0.79% to 12,575.80. It touched a fresh 15-month low of 12,514.02 in mid-afternoon trade. At the days low the Sensex lost 162.17 points. The Sensex opened with 133.74 point upward gap at 12,809.93 and advanced further to touch a high of 12,935.25 in mid-morning trade. At the day's high, the Sensex rose 259.06 points.
The broader based S&P CNX Nifty was down 44.4 points or 1.15% at 3816.70. Nifty hit a 15-month low of 3,790.20 in intra-day trade. Nifty July 2008 futures were at 3821.20, at a premium of 4.50 points as compared to spot closing.
The BSE Sensex is down 7711.19 points or 38.01% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8630.97 points or 40.69% away from its all-time high of 21,206.77 struck on 10 January 2008.
BSE clocked a tunover of Rs 4557 crore today as compared to Rs 4,304.08 crore on Tuesday, 15 July 2008. NSE's futures & options (F&O) segment turnover was Rs 45,738.28 crore, which was higher than Rs 44,122.92 crore on Tuesday, 15 July 2008.
The BSE Mid-Cap index slipped 1.46% to 5,088.28 and the BSE Small-Cap index fell 1.66% to 6,324.45. Both these indices underperformed the Sensex.
The market breadth was weak on BSE with 1788 shares declining as compared to 827 that advanced. 75 remained unchanged.
Most sectoral indices on BSE settled with losses. The BSE Realty index (down 6.31% at 4,219.12), BSE Auto (down 2.38% at 3,394.49), BSE Oil & Gas index (down 1.03% to 8,588.39), BSE PSU index (down 1.19% to 5,752.70), BSE Consumer Durables index (down 2.23% to 3,391.23), BSE Health Care index (up 1.59% at 3,971.41), BSE Metal index (down 2.37% to 11,935.92), BSE Bankex (down 1.96% at 5,400.24), underperformed the Sensex.
The BSE Capital Goods index (down 0.15% at 10,160.53), BSE Power (down 0.65% to 2,209.88), BSE TecK index (down 0.17% to 2,784.50), BSE FMCG index (up 0.85% to 1,897.46), and BSE IT index (down 0.63% to 3,566.98), outperformed the Sensex.
Among the 30-member Sensex pack, 18 declined while the rest them gained.
Indias largest pharma company in terms of sales Ranbaxy Laboratories was the star of the days trading session. The stock galloped 15.10% to Rs 471.05 on high volumes of 69.90 lakh shares after the company's chief executive Malvinder Singh said in a televised conference that the deal with Japan's Daiichi Sankyo remains on track. He also said that the firm would provide all information required for a probe by the US authorities within the next month. It was the top gainer from Sensex pack.
Ranbaxy shares tumbled nearly 23% in last two trading sessions to Rs 409.25 on 15 July 2008 from Rs 531.45 on 11 July 2008 on concerns a US probe may impact Ranbaxy's latest deal with Daiichi Sankyo. US government has filed a motion, seeking certain documents from Ranbaxy over doubts of it indulging in alleged malpractices like concealing and forging crucial data to get marketing approval for its products in the US.
Telecom duo saw divergent trend. While Indias largest cellular services provider in terms of market capitalisation Bharati Airtel advanced 2.68% to Rs 729, Reliance Communications, the countrys second largest cellular services provider in terms of market capitalisation lost 1.13% to Rs 401.50.
Two oil exploration heavyweights saw divergent trend. Oil & Natural Gas Corporation (ONGC) gained 2.60% to Rs 867 while Cairn India lost 3.96% to Rs 226.50
Indias largest cigarette manufacturer in terms of sales ITC gained 2.43% to Rs 164.05. As per reports Amar Singh, whose Samajwadi Party is the key to the survival of the ruling Congress-led UPA Government wants the Unit Trust of India (UTI) and other public financial institutions to divest their stake in ITC in favour of British American Tobacco (BAT). Public financial institutions have a combined 37.62% (as at end March 2008) holding in ITC, which includes 11.90% of UTI and 13.65% of Life Insurance Corporation of India.
Indias largest engineering and construction company in terms of order book Larsen & Toubro (L&T) gained 0.51% to Rs 2291.10 on reports the company plans to form a Rs 2000-crore forging venture with Nuclear Power Corporation of India (NPCIL).
Bharat Heavy Electricals, the countrys largest power equipment maker in terms of sales, was up 1.31% to Rs 1390 on reports the company is in talks with Reliance Industries and Oil & Natural Gas Corporation to build offshore oil rigs.
Hindustan Unilever (up 2.53% to Rs 217), Ambuja Cements (up 1.43% to Rs 81.35), and Reliance Infrastructure (up 1.05% to Rs 755.50), edged higher from Sensex pack.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries shed 1.10% at Rs 1955.10 on 15.51 lakh shares. The stock moved in a range of Rs 2024.90 and Rs 1922.50 during the day.
Real estate stocks cracked on renewed selling pressure. Indias largest real estate developer DLF lost 7.48% to Rs 395 on 22.13 lakh shares. It was the top loser from Sensex pack.
Unitech (down 10.68% to Rs 137.15), Sobha Developers (down 4.51% to Rs 229.55), Omaxe (down 5.55% to Rs 115.55), Ansal Infrastructures (down 4.16% to Rs 82.35), and Anant Raj Industries (down 2.95% to Rs 119), were the other losers from the realty pack.
India's largest software services provider TCS lost 3.16% to Rs 726 ahead of its Q1 June 2008 results due today. The stock had hit a high of Rs 769 in early trade. The stock also hit an all time low of Rs 719.10 in intra-day trade.
Other IT pivotals were mixed. Satyam Computer Services (down 0.49% to Rs 396.25), and Wipro (down 1.16% to Rs 373.55) fell.
However India's second largest software services provider Infosys staged a solid recovery from days low of Rs 1527.35 to settle 0.65% at Rs 1554.10
Auto stocks dropped despite a sharp fall in crude oil yesterday, 15 July 2008. Tata Motors (down 1.72% to Rs 397.05), Mahindra & Mahindra (down 5.55% to Rs 493), Hero Honda Motors (down 2.38% to Rs 638), and Bajaj Auto (down 5.16% to Rs 455), slipped from auto pack.
Among the metal pack, National Aluminium Company (down 5.55% to Rs 354), Hindalco Industries (down 0.55% to Rs 137.15), Sesa Goa (down 5.25% to Rs 2746.25), Sail (down 2.87% to Rs 128.50), and Tata Steel (down 2.08% to Rs 633.55), slipped.
India's largest dedicated housing finance company in terms of operating income HDFC fell 3.92% to Rs 1729.70 after the company reported 25.56% rise in net profit to Rs 468.11 crore on a 26.67% increase in total income to Rs 2318.62 in Q1 June 2008 over Q1 June 2007. The stock hit a low of 1690, a 52-week low.
Banking shares extended yesterdays losses. HDFC Bank down 0.70% to Rs 910
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The recent fate of real estate stocks on the bourses mirrored the first signs of trouble ahead for the industry. Fuel price hike and lower IIP (Index of Industrial Production) numbers were recent setbacks to the sector and now with a 11.05% growth in WPI (wholesale price index), inflation has emerged as a serious threat to the sector, which has been cooling off in recent times.Market experts predict further softening of prices. "Even though prices have corrected by 10-20% and even beyond in some regions, it has not yet touched the bottom. It is advisable to wait till at least the year-end to buy homes," says Jai Mavani, real estate practice head, KPMG.However, since many developers are holding onto prices and even operating as a cartel in some prime pockets like Mumbai, postponing purchase decisions may not really be a solution. Despite the fact that volumes have fallen sharply, established developers are clearly unwilling to drop prices. According to Kotak Institutional Equities' research report, home prices in Mumbai market continue to rise since last October.For more view- realtydigest.blogspot.com
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