| Domestic markets suffered sever setback today, 21aug 2007 on concerns arising from the fluid political situation in New Delhi, with the prospect of a general election looming large. Volatility intensified in second half of the day. The political concerns started dampening the sentiment, visible from yesterday itself, when Indian markets underperformed their Asian peers.
US markets closed firm overnight while most Asian markets settled firm today, 21 August 2007. Most of the European indices were also trading higher after an initial fall.
The BSE 30-share Sensex lost 438.44 points or 3.04% at 13,989.11. It had opened higher at 14,512.19 and advanced further to hit a high of 14,534.51. However it started declining from here on intense selling to touch a low of 13,941.93 as selling continued.
At the day’s low, the Sensex had lost 485.62 points for the day. It oscillated 592.58 points for the day.
The benchmark index BSE Sensex has lost 1879.74 points or 13.43% from its all time high of 15,868.85, struck on 24 July 2007.
The S&P CNX Nifty lost 134.15 points or 3.19% at 4074.90. The Nifty August 2007 futures settled at 4060.05, a discount of 14.85 points as compared to spot closing.
On Monday, 20 August 2007, Left parties asserted that a freeze on the forthcoming negotiations on India-specific safeguards at the International Atomic Energy Agency (IAEA) was a prerequisite for accepting the government’s suggestion of setting up a panel to look into Left’s concerns over the Indo-US nuclear deal.
Left parties had warned the government on Saturday, 18 August 2007, of serious consequences if it pursues with a nuclear deal with the United States. The four Communist parties have 60 members of parliament (MPs) in the 545-member lower house of parliament. Prime Minister Manmohan Singh's government could fall or be reduced to a minority if the Left withdraws support
All the sectoral indices on BSE suffered losses. The BSE Metal index (down 3.45% to 9,847.15), BSE IT index (down 3.68% to 4,294.86), BSE Realty index (down 4.59% to 6,844.63), BSE Healthcare index (down 3.06% to 3,430.42), BSE PSU index (down 3.29% to 6,491.97), and the BSE TECk index (down 3.5% to 3,358.81) were underperformers when compared with the broad market index.
Though trading in the negative territory, the BSE Capital Goods index (down 2.57% to 11,989.97), BSE Oil & Gas index (down 2.79% to 7,408.02), BSE Consumer Durables (down 1.56% to 3,972.30), BSE FMCG Index (down 2.45% to 1,799.05), and BSE Auto index (down 2.69% to 4,475.14) had outperformed the broad market index.
The market breadth was weak on BSE with 2234 shares declining as compared to 509 that advanced, while 44 remained unchanged.
The BSE Mid-Cap index slipped 3.30% to 6,134.23. From a recent high of 6,665.67 on 8 August 2007, the BSE Mid-Cap index has declined 4.84% to 6,342.78 on 20 August 2007.
The BSE Small-Cap index lost 3.80% to 7,538.45. From a recent high of 8,051.22 on 8 August 2007, the BSE Small-cap index had declined 2.71% to 7,832.36 on 20 August 2007.
The total turnover on BSE amounted to Rs 4201 crore as compared to Rs 3,877.61 crore on Monday, 20 August 2007. The NSE F&O turnover was Rs 45485.53 crore as compared to Rs 40,075.04 crore on Monday, 20 August 2007.
All the 30-member Sensex pack were trading with losses
Banking stocks tumbled on concerns of sub-prime lending in US. State Bank of India plunged 5.50% to Rs 1465.30 on 8.05 lakh shares. it was the top loser from the Sensex pack.
HDFC Bank (down 1.80% to Rs 1105) and ICICI Bank (down 4.20% to Rs 835.45) also slipped
Reliance Energy (down 5.16% to Rs 688) and Mahindra & Mahindra (down 4.66% to Rs 612), and were the other key losers from Sensex pack.
Reliance Communication lost 4.22% to Rs 486.50 after denying recent reports it was in talks with Malaysia's Maxis Communications to buy a controlling stake in its Indian unit Aircel Cellular. India's second largest cellular services provider Reliance Communications slipped 2.44% to Rs 495.55. It added 14.6 lakh mobile customers in July 2007 taking its total subscriber base to about 3.7 crore. It had gained 14.5 lakh users in June 2007.
India's top cellular services provider Bharti Airtel slipped 0.65% to Rs 821.70. The company plans to double the number of wireless towers to 80,000 by the end of March 2008.
Bhel, the country’s largest power equipment maker, declined 0.66% to Rs 1599.80. It had hit a high of Rs 1648 on securing order worth Rs 6500 crore to set up two power projects of 1,000 megawatts each
Reliance Industries, the country’s biggest private sector entity by net profit and oil refiner, slipped 2.77% to Rs 1742.10 on 10.65 lakh shares. As per reports, the company has made an oil discovery in the Krishna basin while drilling the third well. The discovery is estimated at around 20 meters of thickness, making it possibly one of the largest oil discoveries on India’s east coast.
IT stocks came under pressure on concerns that they may face tougher market conditions if the US credit woes squeeze IT spending.
Wipro (down 4.94% to Rs 446.30), Satyam Computer Services (down 4.03% to Rs 415.05), and Infosys Technologies (down 3.76% to Rs 1760.15) slipped.
Tata Consultancy Services slipped 4.03% to Rs 1012 after it denied the reports of bagging an outsourcing contract worth $1.5 billion multi-year outsourcing deal from Prudential plc, the UK-based financial services major. WNS Global Services, the country’s second largest BPO firm, said late last week it has been hit by the turmoil in the US sub-prime lending market.
IT companies derive more than half of their revenue from the United States. The rupee was hovering at 41.10 against the US dollar, stronger than Friday's (17 August 2007) close of 41.33/34.
From a recent high of 4,808.43 on 8 August 2007, the BSE IT index had eroded 7.26% to 4,459.07 on 20 August 2007. The BSE IT index had touched a 52-week high Rs 5611.33 on 19 February 2007 and a 52-week low of Rs 4129.09 on 11 September 2006.
Ambuja Cements (down 0.51% to Rs 127.25), HDFC (down 0.45% to Rs 1906.90) and Dr Reddy’s Laboratories (down 0.12% to Rs 624.50) outperformed the market.
Central Bank of India settled at Rs 115.40 on BSE, a premium of 13.14% over its IPO price of Rs 102. It made its debut at Rs 130.10 on BSE. The stock touched a high of Rs 133.25 and a low of Rs 114 during the day. About 2.43 crore shares were traded on the counter on BSE. The Central Bank of India (CBI) IPO had ended on 27 July 2007 with 62.07 times subscription
Real estate stocks were hammered. Ansal API (down 3.06% to Rs 257), Sobha Developers (down 4.66% to Rs 750.55), DLF (down 3.63% to Rs 558.25), Unitech (down 3.23% to Rs 477), and Omaxe (down 12.90% to Rs 273), slumped.
Machino Plastics (up 18.12% to Rs 73.65), Stovec Industries (up 10.48% to Rs 174), Sundaram Fasteners (up 5.52% to Rs 55.45), Perfect Circle (up 5% to Rs 24.15), and JP Hydropower (up 4.52% to Rs 47.40) were the top gainers from the small-cap and mid-cap basket.
English India Clays (down 13.22% to Rs 537), Basant Agro (down 13.20% to Rs 47.35), Zylog Systems (down 13% to Rs 429), Shah Alloys (down 12% to Rs 66.85), and JBF Industries (down 11.52% to Rs 134) were the top losers from the small- and mid-cap basket.
TCI Industries was frozen at 5% upper circuit filter at Rs 4318.50. The scrip has been hitting 5% upper circuit filter for the previous 28 sessions from 9th July 2007 till 20 August 2007. As per reports, the company owns Mukesh Mills property at Colaba, which is worth over Rs 1000 crore.
Rane Engine Valves lost 1% to Rs 281.30 after the Rane Group announced a restructuring to eliminate residual crossholdings and consolidation of group company investments. Rane Brake Linings surged 7.60% to Rs 156.
Bongaigaon Refinery & Petrochemicals tanked 8.64% to Rs 51.30 on turning ex-dividend for a dividend of Rs 3.50 per share on face value Rs 10 each.
Ispat Industries grew 1.07% to Rs 16.01. Recent reports suggest that the company is planning to invest about Rs 10,000 crore within five years to ramp up domestic production. It is also planning to expand overseas through capacity expansion and backward integration.
TRF declined 4.46% to Rs 891.10. After market hours on Monday, 20 August 2007, it scheduled a meeting of board of directors to be held on 8 September 2007, to consider the shareholders' agreement entered with Baker Technology, Singapore, and TRF for acquisition of 51% paid-up share capital of York Transport Equipment (Asia) PTE, Singapore.
JSW Steel slipped 6% to Rs 542 after hitting the day’s high of Rs 599.95.
Gokaldas Exports jumped 10.20% to Rs 252 after the company said private equity firm Blackstone Group is acquiring 70% stake in the company for nearly Rs 660 crore through a two-step deal: 50% from the Bangalore-based Hinduja family and 20% stake through an open offer to other shareholders at an offer price of Rs 275 per share. Post-acquisition, the total stake of the Hinduja family would come down to 19.22%, from current 69.22%.
Exide Industries was unchanged at Rs 55, off its high of Rs 59. It company informed BSE that a meeting of the board of directors of the company will be held on 28 August 2007, to consider an issue of equity shares on a rights basis.
California Software rose 1.71% to Rs 86.40. A unit of Chemoil Energy today, 21 August 2007, offered to buy 20% additional stake in California Software at Rs 100 a share. Kemoil, a Hong Kong-based investment holding company of Chemoil, said it would acquire 2.47 million shares of California Software. After this transaction Kemoil would hold 47.71% in the company.
Construction firm Gayatri Projects fell 7.74% to Rs 255. The company said on today, 21 August 2007, its board would meet on 28 August 2007 to consider raising the foreign fund limit to 49%.
Indusind Bank slumped 6.70% to Rs 49.40 after denying market talks of a foreign bank picking up a stake in the bank. On Monday, 20 August 2007, the Indusind Bank stock had ended up 3.11% to Rs 52.95 boosted by these rumours.
Allcargo Global Logistics shed 1.52% to Rs 840.50 after it said on Monday, 20 August 2007, its board would meet on 27 August 2007 to consider acquisition of Transindia Freight Services.
Patni Computer Systems galloped 7.82% to Rs 422, on reports that private equity firms are close to buying a stake in the software services firm. Private equity (PE) funds Texas Pacific Group and Apax Partners are close to purchasing the stake of two Patni brothers Ashok and Gajendra in Patni Computer Systems.
Dolphin Offshore declined 6.10% to Rs 217.90 despite securing a $8.5-million order from Punj Lloyd. The contract is for providing underwater diving services for the ONGC Heera Redevelopment project. The contract value could be extended by another $3.5 million by providing additional diving services.
HOV Services (down 5.40% to Rs 175.15), Bharat Fertilizer Industries (down 9.39% to Rs 67), Kilburn Engineering (down 13.58% to Rs 63.95), Zyden Gentec (down 9.93% to Rs 34), Bajaj Hindustan Sugar & Industries (down 4.27% to Rs 125.40) and Ion Exchange (India) (down 4.58% to Rs 187.50), declined after BSE said these stocks will be included in trade to trade segment from 24 August 2007.
Most of the Asian markets were trading higher today, 21 August 2007. Hang Seng (up 0.62% at 21,729.35), Shanghai Composite (up 1.03% to 4,955.27), Japan's Nikkei (up 1.06% at 15,899.24) and South Korea's Seoul Composite (up 0.28% at 1,736.18) advanced
However, Taiwan's Taiwan Weighted (down 0.43% to 8,479.05) and Singapore's Straits Times (down 2.82% at 3,228.66) slipped.
US blue-chip stocks rose on Monday, 20 August 2007 after reversing direction in the last hour of trade as the flight to safety in the short-term Treasury bills flagged, suggesting concerns over the stability of credit markets were receding. The Dow Jones Industrial Average rose 42.27 points, or 0.32%, to end at 13,121.35. The Standard & Poor's 500 Index edged down 0.03% to 1,445.55. The Nasdaq Composite Index gained 3.56 points, or 0.14%, to end at 2,508.59.
Oil prices dropped today, 21 August 2007, as traders shifted focus from the threat of Hurricane Dean on US energy facilities in the Gulf of Mexico to worries about global stock markets. Light, sweet crude for September delivery lost 36 cents to $70.76 a barrel on the New York Mercantile Exchange.