Even after three straight sessions of losses, there was no buying support at lower levels and the indices saw one of the worst intra-day falls this calendar year. Banks and cement stocks, which were the worst hit yesterday, remained under severe selling pressure while telecom stocks also lost substantial ground. Select oil and gas stocks also gave up substantial ground.
Sensex closed with massive losses of 389 points at 13633 and the Nifty crashed 101 points to end at 3939. Nifty March futures closed at a discount of 5 points to the spot index.
Banking stocks remained under heavy pressure today as well. OBC was the worst performer among index stocks with losses of 6.89 per cent. ICICI Bank slumped 4.14 per cent.
HDFC Bank slipped 2.95 per cent while PNB closed 2.72 per cent lower. SBI shed 1.84 per cent.
Bharti Airtel saw heavy profit booking and closed 5.59 per cent lower. VSNL gave up 4.13 per cent and Reliance Communications ended 3.69 per cent lower
Jet Airways gave up a major part of its recent gains and closed 6.31 per cent lower
Cement stocks got no respite from the selling pressure. Grasim was once again the biggest loser and ended 6.23 per cent lower. ACC gave up another 4.73 per cent and Gujarat Ambuja lost 2.14 per cent.
ITC continued it's down trend and ended 4.24 per cent lower
ONGC slipped another 2.92 per cent
Higher oil prices led to a 4.1 per cent fall in HPCL while BPCL lost 3.57 per cent.
Wipro was the worst performer among tech stocks with losses of 4.09 per cent
There were only 4 gainers among Nifty stocks. Gail India continued it's up trend and ended 2.32 per cent higher.
Tata Steel was firm throughout the session and gained 1.22 per cent
Suzlon extended its gains by 0.76 per cent
Reliance Industries gave up most of its intra-day gains and closed marginally higher
Global markets / crude oil
US markets were mixed for the second day yesterday as traders remained undecided about market direction. While there are concerns that markets are overheated to some extent, hopes of interest rate cuts by the Fed remain. The sustained recovery in crude oil prices helped oil stocks.
The Dow index gave up over 0.4 per cent for the second session while the S&P 500 closed nearly 0.1 per cent lower. Technology stocks were far better off and the NASDAQ sustained the up trend with gains of 0.25 per cent.
Asian markets were mostly firm today and sustained the up trend. Singapore was the best performer with gains of over 0.65 per cent. Malaysia ended 0.55 per cent higher and Japan extended its gains and closed nearly 0.45 per cent higher. South Korea ended 0.3 per cent higher.
Indonesia continued it's down trend and ended 0.9 per cent lower while Hong Kong closed nearly 0.5 per cent lower. Thailand gave up 0.4 per cent.
European markets opened higher but have shed part of the gains in later trades. Major indices are trading with modest gains of between 0.05 and 0.15 per cent each in early afternoon trades.
Crude oil prices sustained the up trend yesterday as US fuel inventories were lower than expectations. Near month NYMEX futures closed around 1.5 per cent higher yesterday at $60.95 per barrel. The commodity is trading with marginal gains above $61 per barrel in European trades today.
Large-cap news flow
- There are unconfirmed reports that Reliance Industries would hive off its retail business into a separate company, which would come out with an IPO by next year. Other reports indicate that the company may make a preferential issue to promoters.
- Gujarat Ambuja Cements has received High Court approval for the merger of Indo-Nippon Special Cements, a wholly owned subsidiary, with the company
- ICICI Bank has hiked its lending and deposit rates by another 50 basis points
- The Calcutta High Court has asked the West Bengal government to submit the details of land acquisition for the Tata Motors small car project
- HPCL is planning to rope in Kuwait Petroleum, Oil India and French oil major Total for the expansion of its Vizag refinery
- Ranbaxy has lost a patent case relating to a prostate drug to a Japanese company
Mid-caps and small caps also continued to crumble. The CNX Mid-Cap index ended with losses of 99 points, or 1.95 per cent, at 5000. BSE mid-cap index lost 2.4 per cent and the BSE small cap index ended with massive losses of 3.75 per cent.
Power Finance Corporation, a leading infrastructure finance company, got listed today. Issued at Rs85 per share, the stock opened at Rs113 on the NSE and touched a high of Rs119.4. The stock finally settled at Rs111.65 per share
Indo-Count, BAG Films, SSI, Swaraj Mazda, OCL, GMDC, House of Pearl Fashions and Weizman Industries were the other major mid-cap gainers
Most of the recent listing corrected substantially today. Cambridge Technologies slumped 14.68 per cent while Redington ended 12.13 per cent lower. Pochiraju lost another 11.15 per cent lower while Cinemax closed with losses of 11.56 per cent. AI Champdany closed at 10 per cent lower circuit.
Paramount Cables, Tips Industries, Rajasthan Rayon and Soma Textiles were the major losers among mid-caps.
Mid-cap news flow
- Gujarat Gas has announced a stock split in the ratio of 5 shares of Rs2 each for every Rs10 share
- Zensar Technologies has acquired a US-based company for nearly $25 million. The company has also clarified that it has no information about reports of RPG group buying out a 29 per cent stake in the company from Fujitsu
- Shareholders of McLeod Russell have approved the merger of Doom Dooma Tea with the company
- IFCI has clarified that no sale of land and assets of MSL has been completed though the company has filed a recovery suit with debt recovery tribunal and a notification for the sale of assets has been issued
- The board of UB Engineering would meet early next month to consider raising additional funds
- Apollo Hospitals has fixed the conversion price of warrants issued to promoters at Rs442.55 per share
- Bartronics has closed its QIP issue today
- Shopper's Stop has clarified that it has not yet acquired a 51 per cent stake in Hyper City Retail, though the company has an option to do so. The company has tied up with a UK-based company to develop catalogue retailing in the country under franchise from them. Shopper's Stop has also entered into a tie-up with another overseas company for airport duty free shops.
- Accentia Technologies has acquired a Bangalore-based company for an undisclosed sum and would raise $10 million to fund possible acquisitions in the US
- Pratibha Industries would raise up to Rs200 crore from a QIP issue
- Atlanta has withdrawn its proposed stock split following a SEBI directive
- Sterlite Optical has received orders worth Rs150 crore for supplying power transmission conductors
- Bombay Rayon Fashions has acquired a 70 per cent stake in a UK-based company for more than $3 million
- Flawless Diamond has opened a new retail showroom near Mumbai
- Birla VXL has sold a part of its stake in its subsidiary OCM India to a US-based private equity investor. Following the transaction, OCM has ceased to be a subsidiary of the company
- Phoenix Mills would transfer its development rights for a hotel near Mumbai to a subsidiary for a sum not less than Rs200 crore
- The board of IID Forgings would meet tomorrow to consider a preferential issue of 12 lakh equity shares and 7.5 lakh warrants at a price of Rs500 per share
- Kerala Ayurveda has formed a subsidiary in Germany to develop software for the healthcare sector
*Disclaimer: The author may have positions in some of the stocks specifically mentioned above at the time of writing this article. This analysis / report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content the author or publisher shall not be held responsible for any loss caused to any person whatsoever.