Sensex crashes by 860 pts during the week

Mumbai, Oct 20: The benchmark Sensex came down by 859.06 points, a dip of 4.66 per cent, to 17559.98 during the week ended October 19, and was witness to an extremely volatile market throughout the week.

Similarly, The S&P CNX Nifty NSE index also eased by 212.95 points or 3.9 per cent to 5215.30 during the week on Securities and Exchange Board of India (SEBI)'s proposal to curb Foreign Institutional Investment (FII) inflows.

Brokers said that after starting on a firm note, the market lost ground later as SEBI draft norms on restriction of FII inflow sent shivers on the street. Volatility was high in the three trading sessions after SEBI issued the draft proposals after trading hours last Tuesday. The IT stocks weathered the market turmoil as the Rupee weakened.

The BSE Mid-Cap index lost 290.96 points, or 3.86 per cent, to 7238.58 during the week. The BSE Small-Cap index eased by 298.33 points, or 3.28 per cent, to 8800.32 during the week.

Last Monday, the market had consolidated throughout the day after an initial surge. Easing of political worries and improved Index of Industrial Production (IIP) figures for August 2007 released during the previous trading session on October 12 2007, boosted the bourses. The 30-share BSE Sensex surged 639.63 points, or 3.47 pc, to 19058.67 -- a record closing high. It hit an all-time high of 19095.75 in late trade on that day. The S&P CNX Nifty of NSE rose by 242.15 points, or 4.46 pc, to 5670.40. Nifty recorded an all time high of 5682.65 on that day, brokers said.

Last Tuesday, weak global markets played spoilsport for the domestic bourses as they ended flat note. The 30-share BSE Sensex lost 6.81 points, or 0.04 per cent, to 19051.86 on that day. It opened on a positive note and soon rose to hit its all-time high of 19174.45 on that day. It later pared gains. The S&P CNX Nifty also lost 2.35 points, or 0.04 pc, to 5668.05.

Wednesday last, after an initial jolt, the market rebounded from lower level even as it ended in the red.

Earlier, SEBI's proposal to clamp down participatory notes to restrict foreign inflows, announced after trading hours on October 16, created havoc on the bourses on Wednesday. Trading was halted just within minutes of opening, as marketwide circuit filters were triggered by a steep fall. The BSE 30-share Sensex ended down by 336.04 points, or 1.76 per cent, to 18715.87. The S&P CNX Nifty lost 108.75 points, or 1.92 per cent, to 5559.30.

Brokers informed that SEBI chairman M Damodaran had assured that participatory notes (PNs) are not being banned. Finance Minister P Chidambaram too assured the same.

Last Thursday, the market plunged in the late trade with Sensex losing more than 900 points at one point of time in late trade. The 30-share BSE Sensex ended down 717.43 points, or 3.83 per cent, to 17998.39. The S&P CNX Nifty lost 208.3 points, or 3.75 per cent, to 5351.

The market lost further ground on October 19 with Sensex shedding 438 points on worries that official attempts to moderate FII inflows would see foreigners pull out funds.

Reliance Industries lost nearly 4 per cent to Rs 2469.20 during the week. Reliance Industries Limited (RIL) reported 27.9 per cent growth in net profit at Rs 3837 crore and 6.6 per cent growth in net sales to Rs 32,043 crore in Q2 September 2007 over the corresponding period last year. The results are after taking effect merger of IPCL in the company. RIL's gross refining margin was a robust USD 13.6 a barrel in Q2 September 2007 compared to USD 9.1 in Q2 September 2006.

The results hit the market after trading hours last Thursday.

Though the results were strong, there was no announcement of stock split/bonus. The market was agog with speculation that RIL could announce a bonus issue or stock split at the time of announcing the Q2 results.

Services gained 4.87 per cent at Rs 460.05, while Infosys fell by 1.1 per cent to touch Rs 1908.10 during the week.

The BSE Capital Good index fell by 7.47 per cent to 15373.11 following major losses by Larsen and Toubro (L&T) and Bharat Heavy Electrical (Bhel). Larsen&Toubro (L&T) lost 10 per cent to Rs 3023.05 while Bhel lost 12.3 pc to Rs 2051.60.

Other stock major loser was Reliance Energy and its stock declined by 18.5 per cent to Rs 1333.25, while State Bank of India declined by 10.4 per cent to Rs 1667.60.

Consolidated Construction Consortium settled at Rs 791.45 on BSE, on October 15, a premium of 55.18 per cent over IPO price of Rs 510. The stock debuted at Rs 801, a premium of 57.05 per cent against the IPO price. Consolidated Construction undertakes turnkey building contracts for corporate, infrastructure and realty players.

Dhanus Technologies settled at Rs 311.15 on BSE last Wednesday, a premium of 5.47 per cent over the IPO price of Rs 295. The stock debuted at Rs 300.20, premium of 1.73 per cent over the IPO price.

Chennai-based Dhanus Technologies offers telecommunication and unified messaging and enhanced logistics services.

Supreme Infrastructure India (SIIL) settled at Rs 175.25 on BSE on last Thursday, a premium of 62.2 per cent over IPO price of Rs 108. The stock debuted at Rs 189, a premium of 75 per cent over the IPO price. SIIL is into infrastructure development, primarily engaged in civil construction.

Saamya Biotech (India) settled at Rs 15.30 on BSE on yesterday, a premium of 53 per cent over IPO price Rs 10. The stock debuted at Rs 17.50, a 75 per cent premium over IPO price of Rs 10.

Hyderabad-based Saamya Biotech (India), a first generation biotech company, has entered into an agreement for technology transfer with Biofin Laboratories s.r.l Italy for production of Daunomycin and Hyaluronic Acid.

Last Thursday, Finance Minister P Chidambaram approved 14 foreign direct investment (FDI) proposals amounting to Rs 1,258 crore, which were recommended by the foreign investment promotion board (FIPB). The proposals relate to biotechnology, commerce, new and renewable energy and information technology, among others. Six proposals have been deferred.

Reserve Bank of India (RBI) governor Yaga Venugopal Reddy, while addressing the Peterson Institute of International Economics in Washington last Thursday, highlighted that managing capital flows is a challenge for the Indian economy and with the opening of trade, it has become more difficult.

The International Monetary Fund (IMF), in its latest World Economic Outlook report, has revised downwards its forecast for India's gross domestic product (GDP) to 8.9 per cent from 9 per cent for the calendar year 2007. The growth projection has been retained at the previous estimate of 8.4 pc for 2008, brokers added.

UNI