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The benchmark indices tumbled after opening distinctly weak. The 30-share BSE Sensitive Index (Sensex) opened with a huge negative gap of 351 points at 17,228. Selling gained momentum after the benchmark index slipped below the 17,000-mark.
The Sensex tumbled to a low of 16,635 towards the end of the trading session and finally settled with a loss of 901 points (5.1 per cent) at 16,678 — the second-biggest single-day loss in absolute terms in history. Earlier crash of 1,408.35 points or 7.41 per cent to 17,605.35 on January 21 this year was biggest ever drop in record. The NSE Nifty ended below its physchological 5,000-mark at 4,953 - down 271 points (5.2 per cent). Nifty March 2008 futures were at 4882, a discount of 71 points as compared to spot closing of 4953. The BSE market breadth was extremely negative - out of 2,766 stocks traded, 2,330 declined, 396 advanced and 40 were unchanged. BSE clocked a turnover of Rs51.07 billion from Rs67.22 billion on Friday. NSE’s futures & options segment turnover was Rs365.92 billion from Rs490.83 billion Friday.
Biggest shakers of the Sensex were SBI, HDFC, DLF and BHEL. SBI slumped nearly 9 per cent to Rs1,923. DLF and HDFC dropped around 8.5 per cent each to Rs715 and Rs2,571, respectively.
BHEL tumbled 8 per cent to Rs2,099. Hindalco and NTPC declined 6.5 per cent each at Rs190 and Rs189, respectively. Reliance Inds, ICICI Bank and Reliance Communications dropped around 6 per cent each to Rs2,305, Rs1,024 and Rs541, respectively. Reliance Energy, Satyam and Larsen & Toubro slipped over 5 per cent each to Rs1,486, Rs412 and Rs3,344, respectively. Infosys declined nearly 5 per cent to Rs1,472. ITC, HDFC Bank and Bharti Airtel shed around 4.5 per cent each at Rs193, Rs1,391 and Rs791, respectively.
However, a few Sensex stocks showed resistance to huge drift of the day. Cipla and Hindustan Unilever gained 2 per cent each at Rs212 and Rs232, respectively. Ranbaxy added 1 per cent to Rs451.
Essar Oil topped the value chart with a turnover of Rs2.58 bilion followed by Reliance Petroleum (Rs2.38b), OnMobile Global (Rs2.35b), Reliance (Rs2.31b) and Reliance Capital (Rs2.08b).
Reliance Petroleum led the volume chart with trades of around 14.2 milliion shares followed by Reliance Natural Resources (12.1 mn), IFCI (10.9 mn), Essar Oil (10.2 mn) and Nagarjuna Fertilisers (10 mn).
The BSE Mid-Cap index was down 4.11 per cent at 7,364.85, while the BSE Small-Cap was down 4.05 per cent at 9,238.35.
The BSE Bankex fell 6.72 per cent to 9,434.44. ICICI Bank (down 6.10 per cent at Rs1,024.45), State Bank of India (down 8.83 per cent at Rs1,923.40), Punjab National Bank (down 9.65 per cent at Rs545.85), Kotak Mahindra Bank (down 9.07 per cent at 728.70), Bank of India (8.48 per cent at Rs329.05) and Axis Bank (down 7.70 per cent at Rs940.30).
The BSE Power index fell 6.35 per cent to 3,437.75. Suzlon Energy (down 10.40 per cent at Rs252.05), Tata Power (down 6.78 per cent at Rs1,306.05), CESC (down 6.17 per cent at Rs500.55), Reliance Energy (down 5.24 per cent at Rs1,485.55), Torrent Power (down 5.17 per cent at Rs140.35) and Reliance Power (down 4.32 per cent at Rs412).
The BSE Realty index fell 6.39 per cent to 8,953.95. DLF (down 8.44 per cent at Rs714.70), Parsvnath DevelopeRs(down 6.27 per cent at Rs251.85), Ansal Properties & Infrastructure (down 6.22 per cent at Rs202), Housing Development & Infrastructure (down 5.97 per cent at Rs805.20), Mahindra Lifespace Developers (down 5.92 per cent at Rs536.70), Indiabulls Real Estate (down 5.78 per cent at Rs596.25) and Unitech (down 5.50 per cent at Rs339.50).
Auto stocks, which bucked the weak sentiments in early trades, soon dipped into red in the later half of trading session. The BSE Auto index fell 0.80 per cent to 4,848.05. Escorts (down 2.63 per cent at Rs103.55), TVS Motor (down 2.40 per cent at Rs42.65), Ashok Leyland (down 1.74 per cent at Rs36.80), Mahindra & Mahindra (down 1.23 per cent at Rs684.25), Bajaj Auto (down 1.08 per cent at Rs2,255.50) and Tata Motors (down 1.01 per cent at Rs693.15).
However, Hero Honda (up 1.26 per cent at Rs774.10) and Maruti Suzuki (up 0.82 per cent at Rs874.30). The auto stocks were in demand as cut in excise duties in the fiscal Budget raised expectation of pick up in sales in coming months.
Among the side counters, India Infoline (down 10.81 per cent at Rs996.25), Indiabulls Financial Services (down 10.78 per cent at Rs548.80), Reliance Capital (down 10.29 per cent at Rs1,631.10), Adlabs Films (down 9.66 per cent at Rs757.90) and Steel Authority of India (down 9.65 per cent at Rs230.80).
Meantime, the budget was being analysed and debated in market cirlces very extensively. On constructive side, the analysts felt the Indian economy is currently witnessing a moderation in growth from a solid growth last year mainly due to sluggish consumption growth. Concerns also remain about possible spike in inflation. Analysts reckon that the FM has targeted these two areas in fiscal Budget 2008-09 presented on Friday. FM seeks to revive consumption growth through higher disposable income in the hands of the middle class through rejit in personal income tax slabs, which will result in sustantial tax saving for individual tax payers. Analysts also reckon that the implemention of the Sixth Pay Commission will aid consumption growth.
The Sixth Pay Commission was constituted in October 2006 to recommend comprehensive changes in salary structure of the government employees.
The measures aimed at inflation control include a major fillip to agricultural sector to boost farm prodution, across the board cut in Cenvat to 14 per cent from 16 per cent and specific excise duty cuts. Brokerage IDFC-SSKI Securities in a post-budget report has maintained its earnings growth estimates for 30-Sensex firms.
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