Market suffers heavy losses in global rout in equities – October 10, 2008

The domestic bourses suffered heavy losses today on the back of global sell-off and on data showing dismal industrial production growth in August 2008. The BSE 30-share Sensex provisionally ended lost 791.67 points. IT stocks suffered on downward revision in guidance in dollar terms by IT bellwether Infosys Technologies. Banking stocks were volatile reacting to a slew of news such as cut in cash reserve rate, slowdown in industrial production and fall in inflation. Reliance Communications declined 22.65%, Reliance Infrastructure lost 20.09% and Jaiprakash Associates shed 18.36%
Securities & Exchange Board of India (Sebi) chief C B Bhave today said there was no unusual activity in the stock market. He further said there has been no shorting by institutions in cash markets.
Inflation based on the whole price index rose 11.8% in 12-months to 27 September 2008, lower than previous week's 11.99% rise.
Stocks fell across the globe despite worldwide central bank measures to stave off a crisis. Bank bailouts, liquidity injections and interest rate cuts across the world have failed to quell investor anxiety with Asian stocks tumbling today, following overnight setback in US stocks.
Back home, the Reserve Bank of India (RBI) toady cut the cash Reserve Ratio (CRR) second time in the week. The central bank cut CRR by 100 basis points after 50 basis point cut earlier in the week.
Trading in US index futures suggested the Dow would fall 187 points at the opening bell.
The Indonesian stock exchange suspended trading for a third day, and exchanges in Bangkok and Vienna halted trading after shares fell more than 10 %, triggering circuit-breaker rules.
In Moscow, the Russian Duma, or Parliament, approved a financial sector bailout package valued at more than $80 billion. Trading on Russian stock exchanges was suspended until further notice.
As per the provisional figures, the BSE 30-share Sensex ended down 791.67 points or 6.99% to 10,536.69. The index plunged 1,088.50 points at the day's low of 10,239.76 at the onset of the trading session, its lowest level since 24 July 2006. The Sensex fell 424.33 points at day’s high of 10,904.13, in early trade.
The S&P CNX Nifty was down 235,15 points or 6.69% to 3,278.50 as per the provisional figures. Nifty hit a low of 3,198.95 in early trade, its lowest level since 9 August 2006.
BSE clocked a turnover of Rs 5,073 crore today as compared to a turnover of Rs 5,135.12 crore on 8 October 2008.
The BSE Mid-Cap index ended down 8.62% at 3,664.75. The BSE Small-Cap index was down 7.32% at 4,355.17. Both the indices underperformed Sensex.
The market breadth was extremely weak. On BSE, 391 shares advanced as compared to 2,180 that declined. 47 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries slumped 7.25% to Rs 1,530. The stock recovered from the session’s low of Rs 1,480.
India’s largest drug maker by sales Ranbaxy Laboaratories spurted 4.05% to Rs 290.55 after the US government withdrew a motion against Ranbaxy Laboratories after the drugmaker submitted a comprehensive set of audit documents to the authorities.
Among the major sensex losers were, Jaiprakash Associates (down 18.36% to Rs 74.25), Reliance Infrastructure (down 20.09% to Rs 510) and Reliance Communications (down 22.65% to Rs 232.050) slumped.
India's biggest private sector bank by net profit ICICI Bank lost 17.25% to Rs 375.25. The stock came off session's low of Rs 326.70. India's second-largest bank, has very small exposure to the global financial crisis and there should be no concerns about liquidity, its joint managing director Chanda Kochhar said. Her comments came after the bank's stock fell as much as 28% today as panic-stricken investors dumped the shares in a weak market.
India's second biggest private sector bank by market capitalisation HDFC Bank was down 4.66% at Rs 1,054, off the session's low of Rs 975.55.
India's largest state-run lender by market capitalisation State Bank of India rose 1.8% to Rs 1,346, off a low of Rs 1181.15.
IT stocks recovered after earlier fall on Infosys’s weak outlook. India’s second largest IT exporter by sales Infosys fell 2.74% to Rs 1,220. The stock recovered from the session’s low of Rs 1,040. Infosys said it has revised the US dollar guidance downwards to reflect the current economic situation and the drastic depreciation of major global currencies against the US dollar. Infosys expects earnings per American depository share at $2.23 for the year ending March 2009, a growth of 12.6%. At the time of Q1 June 2008 results, the company had forecast earnings per American depository share at $2.31 to $2.35 for the year ending March 2009, a growth of 16.7% to 18.7%.
Infosys consolidated net profit rose 9.9% to Rs 1432 crore on 11.6% growth in sales to Rs 5418 crore in Q2 September 2008 over Q1 June 2008. The company announced the results before trading hours today, 10 October 2008.
Tata Consultancy Services, Wipro and Satyam Computer Services tumbled between 4.49% to 7.17%.
The Indian rupee fell to a record low past 49.07 per dollar today as the spreading global financial crisis hurt sentiment in Asian stock markets, leading to concerns of a large outflow of foreign funds from India. IT exporters benefit from the weaker rupee as they derive most of their revenues in dollars.
India’s largest steel maker by sales Tata Steel slumped 17.56% to Rs 278.80. ArcelorMittal SA and Tata Steel have reportedly shown interest in mining coal in collaboration with Coal India from the latter's 18 abandoned underground mines.
India’s largest aluminum maker by sales Hindalco Industries slumped 10.96% to Rs 86.20 even as the company said IGH Holdings, a promoter of the company has acquired 8.94 lakh shares or 0.05% of equity capital of the company by way of open markets purchases.
Tata Power Company declined 2.59% to Rs 783.80. The company is reportedly exploring the option of raising its stake in Indonesia's Bumi Resources Tbk, the world’s second largest coal company, after a sharp erosion in the value of the shares pledged by Bumi's parent firm, Bakrie & Brothers, with various lenders.
India's industrial production rose at a dismal 1.3% in August 2008 compared to a 10.9% growth in August 2007. Manufacturing grew a poor 1.1% in August 2008 versus 10.7% growth in August 2007. Consumer durables production rose 5.1% in August 2008 verses 6.2% growth in August 2007. Capital goods prodcution rose 2.3% in August 2008 verses 14.7% growth in August 2007. Meanwhile, industrial production growth for July 2008 was revised upwards to 7.4% from 7.1%.
European markets which opened after Indian market were sharply lower. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down between 7.7% to 9.37%.
Overnight, US stocks slumped more than 7% on fears that credit markets would stay frozen, paralysing the world's financial system and slowing economies to a standstill.
US light crude for November delivery fell $4.16, or 4.8%, to $82.43 a barrel today, 10 October 2008, just above its earlier low of $82.00, in its biggest two-week decline since the start of the Iraq war in 2003. Oil slipped on fears that market turmoil will send demand for fuel slumping