Sensex crashes by 383 points during the week

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Mumbai, Jun 14: The Bombay Stock Exchange Sensex crashed by 382.56 points or 2.45 per cent to 15,189.62 in the week ended June 13,2008. The S&P CNX Nifty index of NSE also dropped by 110.70 points or 2.39 pc to 4,517.10 in the week on profit booking by local operators in view of the reverse repo being hiked by 25 basis points to eight per cent and inflation rate zooming higher at 8.75 per cent.

Industrial production rose 7 pc in April 2008 from a year earlier, rebounding strongly from the previous month's provisional 3 pc rise, data released by the government said. Manufacturing production rose 7.5 pc in April 2008 from a year earlier, compared with a provisional 2.9 pc growth in March 2008. The tumbled to register its lowest level in calendar year 2008 as soaring crude oil prices, spiralling inflation and weak global cues dampened sentiment. Heavy offloading from foreign institutional investors (FIIs) caused the market to register its fourth straight weekly loss in the week ended Friday June 13.

The key benchmark indices settled lower in three out of five trading sessions. BSE Mid-Cap and BSE Small-Cap indices outperformed the Sensex, a leading brokers said.

The BSE Mid-Cap index fell 121.98 points or 1.92% to 6,228.17 in the week. The BSE Small-Cap index shed 114.33 points or 1.48% to 7,581.72.

The Sensex is down 6,017.15 points or 28.37% from its all-time high of 21,206.77 hit on January 19, 2008.

Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices. FIIs dumped shares worth Rs 5,321.50 crore (till June 11 2008). FII outflow in calendar year 2008 totalled Rs 20,690.90 crore (till June 11, 2008). On the other hand, domestic funds were net buyers to the tune of Rs 894.89 crore in the month of June 2008, during this period, brokers added.

Trading for the week started on a bearish note as key indices slumped on Monday due to surging global crude oil prices and setback in US stocks played the spoilsport. The 30-share BSE Sensex tumbled 506.08 points, or 3.25 pc, at 15,066.10 and the broader based S&P CNX Nifty shed 126.85 points or 2.74 pc at 4,500.95, on that day.

The market extended losses on Tuesday, as weakness in global markets once again weighed on the domestic bourses. The 30-share BSE Sensex lost 176.85 points, or 1.17 pc, at 14,889.25 and the broader based S&P CNX Nifty was down 41.25 points, or 1.14 pc, at 4,449.80.

On that day, both the key indices hit their lowest levels in 2008, with Sensex hitting a low of 14,645.31 and Nifty 4,369.80.

The market recovered on Wednesday, as investors resorted to bargain buying after recent steep fall in share prices, taking cue from firm Asian markets. The 30-share BSE Sensex rose 296.07 points, or 1.99 pc, at 15,185.32 and the broader based S&P CNX Nifty jumped 73.8 points, or 1.66 pc, at 4,523.60, on that day.

Improved April 2008 industrial production data, firm European markets and higher US futures markets triggered gains on domestic bourses on Thursday, after an earlier steep intra-day fall caused by the Reserve Bank of India's (RBI) decision to raise repo rate - a short term interest rate by 25 basis points to 8 pc after trading hours the previous day. The 30-share BSE Sensex gained 64.88 points, or 0.43 pc, at 15,250.20 and the broader based S&P CNX Nifty rose 15.75 points, or 0.35 pc, at 4,539.35, on that day.

The market drifted lower on Friday, with inflation surging to a seven-year high. The 30-share BSE Sensex declined 60.58 points, or 0.40 pc, at 15,189.62 and the broader based S&P CNX Nifty pared 22.25 points, or 0.49 pc, at 4,517.10 India's largest drugmaker by sales, Ranbaxy Laboratories, surged 11.86 pc to Rs 566.90 in the week. Ranbaxy founders Malvinder Singh and Shivinder Singh inked a deal to sell their combined 34.8 pc stake to Japanese drug maker Daiichi Sankyo at Rs 737 a share.

Daiichi also seeks to acquire majority of the voting capital of Ranbaxy. The total transaction value is expected at about Rs 14,740 crore to Rs 19,800 crore depending on the response to a mandatory 20 per cent open offer which the Japanese drug maker will be making to Ranbaxy shareholders.

India's largest private sector firm by market capitalisation and oil refiner, Reliance Industries (RIL), rose 1.29 pc to Rs 2,268.30.

RIL's chairman Mukesh Ambani said that the company will pursue greenfield investment in polyester.

India's second largest telecom services provider by sales, Reliance Communication (RComm), slipped 0.63 pc to Rs 543.55. As per reports, RComm and the South African telcom company MTN will decide the share swap ratio at which Anil Ambani will transfer his stake in RComm to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RComm.

India's third largest IT exporter by sales, Wipro, declined 5.38 pc to Rs 477.85. It is reportedly bidding for 12 contracts worth at least USD 100 million each as it seeks bigger clients.

India' largest engineering and construction firm by sales, Larsen&Toubro (L&T), was up 1.05 pc to Rs 2,710.15. L&T has reportedly decided to delay the listing of its software business unit L&T Infotech to 2009-10 due to unfavourable market condition. The firm had earlier decided to go for L&T Infotech's initial public offer in the second half of this fiscal.

India's largest private sector bank by net profit, ICICI Bank, shed 0.78 pc to Rs 764.80. It is reportedly cutting about 1000 jobs at different levels. While the company insisted that only the poor performers had been asked to leave, reports said the job cut was part of the company's attempt at cutting costs, mainly in segments such as retail, rural and agri-credit.

India's largest dedicated housing finance firm by operating income, HDFC, slumped 9.11 pc to Rs 2,133.30. HDFC's chairman Deepak Parekh said the company will take a decision on raising interest rates on home loans by end of this month. He said there was upward pressure on interest rates.

India's largest commercial vehicle maker by sales, Tata Motors, lost 4.42 pc to Rs 516.20. As per reports, it has planned to raise an additional USD one billion in the international market to fund its expansion plans, which include strategic alliances and acquisitions.

Diversified company, Grasim Industries, fell 3.56 pc to Rs 2182.30 after the company said on Tuesday it had sold its sponge iron business Vikram Ispat to Welspun Power and Steel for Rs 1,030 crore.

Among the side counters, GHCL was up 41.52 pc to Rs 71.75 followed by Aurobindo Pharma up by 16.98 pc to Rs 329.95, Chambal Fertilisers&Chemicals up by 13.09 pc to Rs 91.15, Fortis Healthcare by 16.03 pc to Rs 82.50, and Zenotech Laboratories surged by 11.85 pc to Rs 109.45.


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