Sensex crashes by 161 pts, closes at 13,124 pts

Mumbai, Mar 26: The BSE Sensex today closed a negative at 13,124.32 with a major loss by 161.61 points against 13,285.93 on the previous day on sustained heavy selling pressure by FIIs and mutual funds.

A leading broker said,'' The BSE Sensex, which turned weak in the early-afternoon, kept declining as investors exited long positions ahead of the March 2007 deriviative contracts expiry, due on March 29 2007.

The 30-share BSE Sensex slumped by 161.61 points and closed a low at 13,124.32. It had opened higher, at 13,345.73. But the benchmark index was unable to sustain higher levels, and succumbed to pressure. Its low for the day was at 13,090.80.

Similarly, the BSE BANKEX and CG indices also declined sharply by 135.11 and 91.29 points respectively.Both the indices closed a low at 6687.22 for BANKEX index and for CG index at 9038.49 points, followed by AUTO index by 89.89 and settled at 4950.03 points, IT index by 58.31 points and touched at 5009.42, TECK index by 35.06 points and finished at 3590, SML index by 30.87 and quoted at 6425.74, MID CAP index by 24.61 and closed at 5376.72 and OIL&GAS by 21.57 and closed at 6412.60.

Meanwhile, S&P CNX Nifty index of NSE also eased by around 42 points and finished at 3819.95.

Volatility is expected to remain high ahead of the expiry of March 2007 derivative contracts. With the market scheduled to remain closed tomorrow for Ram Navami, only three trading sessions are left for expiry of the March 2007 contracts.

The total turnover on BSE amounted to a healthy Rs 3126 crore.

The market-breadth continued weak on BSE, with over 2 losers for every gainer, after a strong showing in opening trade. Against 1,746 shares declining, 849 had advanced by the end. As many as 59 scrips also remained unchanged. Among the 30-Sensex pack, 25 declined while only 5 of them managed to gain.

The Nikkei average rose 0.24 per cent to a one-month closing high on Monday, after gains in exporters including Fanuc were partly offset by losses in property shares such as Sumitomo Realty&Development Co. The Nikkei closed up 41.35 points, at 17,521.96, its highest closing since 28 February 2007. The broad TOPIX index dipped 0.03 per cent to 1,741.37.The Hang Seng Index was up 0.73 per cent which its did not impact on Indian bourses, brokers pointed out.

The next major trigger for the domestic bourses is Q4 March 2007 earnings, reports of which by corporates will start next month.

Analysts expect Q4 results to be strong. Marketmen will closely watch what company managements have to say about the outlook for FY 2008.

Auto shares slipped under pressure, hit by reports that fresh car loans were suffering due to prevailing high interest rates. The sentiment for auto shares was also affected by a surge in global crude oil price, which rose to the highest in three months on news of Iran's detention of 15 British sailors and the United Nation's decision to tighten sanctions against the country, heightening concern that Middle East supplies may be disrupted.

Crude oil for May delivery climbed 51 cents, or 0.8 per cent, to USD 62.79, a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since 26 December 2007.

Tata Motors was the top-loser, down by 4.31 per cent to Rs 755.45, as 2.66 lakh shares changed hands in the counter, after slipping to a low of Rs 749.35. Maruti Udyog (MUL) lost 2.83 per cent to Rs 816, while Hero Honda lost by 1.71 per cent to Rs 668.

Bajaj Auto was down by 0.34 per cent to Rs 2525. Chairman Rahul Bajaj reportedly said the company may build cars to ward off the prospective threat Tatas' Rs 1 lakh car poses to the two-wheeler market. Tata Motors' Rs 1 lakh 'people's car' will hit the roads in 2008, denting top-end motorcycle sales, provided the firm gets the product right.

HDFC Bank (down by 2.95 per cent to Rs 982), HDFC (down by 2.03 per cent to Rs 1562) and Reliance Energy (down by 2.30 per cent to Rs 475) were the other losers.

Among other IT stocks, Tata Consultancy Services (TCS) was down by 2.06 per cent to Rs 1263, on reports that it may get a stake of up to 10 per cent in Deutsche Telekom unit T-Systems for executing USD 1 billion worth of orders.

Infosys Technologies lost by 1.63 per cent to Rs 2062.50, while Wipro declined by 2.68 per cent to Rs 584.80 on concerns arising from the rupee's recent surge against the US dollar. The IT industry derives up to 60-70 per cent of its export revenue from US market.

Hence, any strengthening of the rupee impacts the revenue and profits of IT firms. The US and the Europe, together, account for about 80per cent of India's high-tech export basket.

Index heavyweight Reliance Industries (RIL) was down by 0.74 per cent to Rs 1369, on a volume of 3.70 lakh shares. It moved in a narrow range between Rs 1383.35 and Rs 1361. Reliance Industries(RIL) informed BSE that a separate meeting of equity shareholders, secured creditors (including debenture-holders)&unsecured creditors will be held on April 21, for approving the scheme of amalgamation of Indian Petrochemicals Corporation (IPCL) with itself.

However, IT major Satyam Computers was the top-gainer, up by 1.65 per cent to Rs 471.80, on a volume of 5.15 lakh shares.

State-run oil exploration major ONGC was up by 0.95 per cent to Rs 851.15, as crude oil prices moved north globally.

Private sector steelmaker Tata Steel (up by 1.10 per cent to Rs 443.50) and FMCG major Hindustan Lever (up 1.10 per cent to Rs 200.50) advanced.

Reliance Communication (RCom) advanced 1 per cent to Rs 429.80, after it decided to start an overseas public offer for its international communication subsidiary, FLAG Telecom, for which the ADAG-group firm has shortlisted Goldman Sachs, Deutsche Bank, Morgan Stanley and UBS as merchant bankers for the process, which will see RCom divesting 10 - 15 per cent equity. FLAG Telecom will be listed on the London Stock Exchange.

FLAG Telecom is a 100 per cent subsidiary of Reliance Communication. The proceeds raised from the IPO will be used to part finance expansion plans announced last year, which include laying 50,000 km fresh undersea cable in regions where there is dearth of international bandwidth. The expansion plan could entail an investment of about 1.5 billion dollar (nearly Rs 7,000 crore).

Crisil advanced by 5 per cent to Rs 2614.80, on reports that around 20 companies were currently in talks with it for IPO grading.

Credit rating agencies are gearing up for increased activity following market regulator Sebi's decision to make grading of initial public offerings (IPOs) mandatory. Reports add that Crisil will charge 10 basis points of the amount proposed to be raised, with a ceiling of about Rs 10 -15 lakh. Thus, even a mega-IPO will have a cap on fees, brokers added.

UNI