BSE Sensex plunges 863 points

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Mumbai, May 10: The BSE Sensex plunged 863.05 points, or 4.9 per cent, to close in the red at 16,737.07 in the week ended yesterday. Similarly, S&P CNX Nifty index of NSE also fell 245.6 points, or 4.69 pc, to 4,982.60 in the week due to profit-booking by local operators in view of bearish phase in the global markets.

The market, devoid of any major local or global trigger to guide the investors, declined in all the five trading sessions in the week as rising crude prices and inflation marred the sentiment. The corporate results announced so far have been more or less in line with market expectations. The BSE Mid-Cap index declined 244.81 points, or 3.38 pc, to 6,992.66 in the week. The BSE Small-Cap index slumped 316.07 points, or 3.58 pc, to 8,472.67.

The market regulator Securities&Exchange Board of India (Sebi) on May 5 relaxed the margin in the cash market segment, which it described as an initial step towards cross-margin in the cash market and futures segment. Cross margin facility will be available in case where a market participant has a position in the cash market with an off-setting stock futures position in the derivatives segment. Cross margin benefit will initially be available for only institutional investors.

Indian steel makers on Wednesday agreed to cut prices in government's efforts to rein in inflation. The public and private steel makers said they would cut the price of long products used in construction by Rs 2,000 a tonne, or 5.5 pc, and that of flat products by Rs 4,000 a tonne, or about 10 pc. Steel makers have also decided to hold the price line for the next three months. Steel makers, however, urged the government to discourage iron ore exports and withdraw the tax on steel exports.

The Reserve Bank of India (RBI) on Thursday eased lending norms for infrastructure projects. In a notification, RBI had said the bank loans to infrastructure projects would be treated as sub-standard only if commercial production is delayed by more than two years over the date originally envisaged, instead of the present norm of one year.

The wholesale price index rose 7.61 pc in the week ended April 26. It was marginally higher than previous week's annual rise of 7.57 pc, as per government data released yesterday. The rate was the highest since an annual reading of 7.68 pc on November 13, 2004.

Union Finance Minister P Chidambaram had yesterday said the government had asked cement companies to reduce prices to curb inflation.

Crude oil for June 2008 delivery hit a record high of USD 125.12 a barrel yesterday in electronic trading on the New York Mercantile Exchange. It was the biggest weekly gain since March last year.

Foreign institutional investors (FII) sold shares worth Rs 75.10 crore in first few days in the month of May. They sold shares worth Rs 10,433.20 till May 7. Domestic funds bought shares worth Rs 15.90 crore in first few days in the month of May 2008, brokers said.

The 30-share BSE Sensex fell 109.22 points, or 0.62 pc, at 17,490.90 on Monday. After trading within a narrow range earlier in the day, the market declined in late trading as US stock futures indicated lower opening on the Wall Street. Realty and healthcare stocks outperformed the market. Consumer durables and IT stocks dropped.

Small-cap and Mid-cap counters were active throughout the session with their barometer indices outperforming the Sensex.

The 30-share BSE Sensex fell 117.89 points, or 0.67 pc, at 17,373.01 on Tuesday. The key benchmark indices ended lower as investors resorted to profit-booking due to lack of positive triggers in the market. Selling pressure was seen in mid-cap and small-cap counters with their barometers underperforming the Sensex.

Realty and power stocks rose, whereas FMCG and metal stocks gained.

IT pivotals recovered at the fag end of the session after rupee slipped to eight-month low against the dollar.

The 30-share BSE Sensex dropped 33.70 points, or 0.19 pc, at 17,339.31 on Wednesday. Weakness in Asian markets and a surge in crude oil prices spoiled the sentiments. IT and oil&gas stocks rose, while capital goods stocks and the shares of PSU firms suffered the most.

The 30-share BSE Sensex eased 258.66 points, or 1.49 pc, at 17,080.65 on Thursday. The market succumbed to selling pressure as weak global equities and soaring crude oil prices worried investors.

All the sectoral indices on BSE, barring the BSE Metal index, were in the red. Software and banking shares were worst hit.

The Sensex lost 343.58 points, or 2.01 pc, at 16,737.07 on Friday. The market tumbled after being hit by a series of bad news on the domestic and global front. India's inflation surged to more than 3-year high, global markets declined and crude oil hit yet another record high near USD 125 a barrel.

All the sectoral indices on BSE, barring FMCG index, were in the red. Oil&gas, realty and banking stocks declined sharply.

ITC, India's largest cigarrette maker by sales, declined 1.11 pc to Rs 218.30, and Axis Bank shed 10.38 pc to Rs 836.30 in the week.

As per recent reports, the Union government has given in-principle approval for SUUTI's stake sale in these three companies. Specified Undertaking of Unit Trust of India (SUUTI) was created as a successor to UTI with the assets and liabilities of US 64 and its assured-return schemes, and it reportedly owns 9.04 pc in Larsen&Toubro (L&T), 11.90 pc in ITC and 27.18 pc in Axis Bank (as at end March 2008). The stake sale process is likely to be completed by the end of this financial year.

India's largest telecom services provider by sales, Bharti Airtel, fell 6.28 pc to Rs 842.20 in the week. Bharti said it was in exploratory talks for a stake in MTN Group, South African telecom operator. Bharti Airtel said the current discussions with the MTN Group are still at an early stage and they may or may not lead to any transaction. As per media reports, Bharti Airtel has arranged 12 billion US Dollars for financing and may seek to buy 51 pc of MTN, valuing the company at about USD 39 billion. The acquisition would be the biggest by an Indian company, eclipsing Tata Steel's USD 13 billion takeover of Corus Group Plc in 2007.

Tata Motors, India's largest truck maker by sales, declined 3.14 pc to Rs 668.80. The company reported 5.8 pc fall in total automobile sales to 38,149 units in April 2008 over April 2007 largely on account of dip in passenger car segment and exports.

India's largest engineering and construction company in terms of revenue, Larsen&Toubro, fell 9.73 pc to Rs 2835.55. The company is about to undergo a massive restructuring that will result in the creation of a dozen operating companies under the guidance of separate board of directors. As per reports, the restructuring will lead L&T to become the umbrella organisation with a board to administer the performance of all businesses and ownership of the brand, pegged at around USD 2 billion, effective from July 1.

Shares of India's largest cement manufacturer in terms of annual production capacity, ACC, came down 5.54 pc to Rs 712 in the week.

ACC had said on May 8 that its margins would be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures.

Wipro also came down 0.2 pc to Rs 501.20 followed by Infosys by 2.18 pc to Rs 1,750.50, Tata Consultancy Services down by 2.48 pc to Rs 917.45, Satyam Computer Services down by 4.19 pc to Rs 473.40, ICICI Bank down by 6.57 pc to Rs 874.05, HDFC Bank down by 5.65 pc to Rs 1451.95 and Reliance Industries by 5.5% to Rs 1,527.65 edged lower in the week.

Aishwarya Telecom debuted at Rs 50.10, a premium of 43.14 pc and settled at Rs 90.85 a sharp premium of 159.57pc over its issue price of Rs 35 (the top end of Rs 32- Rs 35 IPO price band) on May 7 2008, brokers added.


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