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BLACK FRIDAY; MKTS SEE WORST WEEKLY CLOSING EVER

Posted by Yogesh on Friday, 24 October, 2008

It was an absolute rout on the Dalal Street. Dismal Asian cues ensured a sharp gap down start and the status quo Credit Policy sealed the fate of the markets. Selling fury gripped the markets in late trade and they capitulated to post their worst session ever.

The benchmark indices have collapsed like a pack of card on account of relentless selling pressure in the heavyweights. The Sensex and the Nifty have seen sharp cut; closed down 11% and 12%, respectively. Credit Suisse said that the recession has already begun in the US, UK and Eurozone.

Reliance Industries, ONGC, Bharti Airtel, DLF, NTPC, Unitech, Reliance Communication, SBI, ICICI Bank, HDFC, HDFC Bank and L&T were biggest contributors in the indices steep fall.

The Reserve Bank of India has announced the credit policy, wherein it has kept all key rates remained unchanged. The growth forecast has been lowered to 7.5-7.8% versus 8% earlier. Inflation target also kept unchanged at 7% by March end. The credit growth stood at 29% currently but the RBI has lowered the target at 20%.

Banking stocks took huge beating on the bourses, after the credit policy. The BSE Bankex slipped 671.27 points or 12.62%, to settle at 4,649.87. ICICI Bank fell 15.20% and SBI lost 12.68%. Kotak Mahindra Bank was down 20.72%. HDFC Bank fell 9.27%.

The panic selling has been seen across the globe. The Dow Futures hit the limit down, which signalled massive sell off. The S&P 500 Futures also hit the limit down. European markets tumbled on weak earnings reports and economic fears. FTSE, CAC and DAX were down 7.5-9.5%, at 4 pm.

Among the Asian markets, Kospi closed down by 10.57% and Nikkei fell 9.6%. Hang Seng and Straits Times plunged over 8.3% each. Shanghai, Taiwan and Jakarta lost 1.92%, 3.19% and 6.91%, respectively. The Korean Q3 GDP grew at the slowest pace in the last four years.

The Credit Suisse feels that the United States, United Kingdom and Eurozone are in the recession. Robert Parker, Vice Chairman of Credit Suisse Asset Management said that hedge funds, retail Mutual Funds are going through capitulation selling. Markets are technically very oversold and the valuations are cheap. The UK is in the recession, and the corporate earnings growth in the UK is being downgraded, he said.

He further said that sustained recovery will need better earnings and economy. Corporate earnings are likely to recover only by starting mid-2009. Bounce is likely in November, but it will be shortlived. The US, UK and Eurozone are in recession. It is extremely unlikely that global markets will shut due to fall, he added.

The UK GDP has declined 0.5% on the quarter-on-quarter basis, which was the first contraction since 1992. Commodities are also feeling the heat of this free fall in the global markets. Gold fell below USD 700 per ounce to a new 13-month low. The crude was trading at around USD 64.5 to a barrel on the NYMEX.

Among the currencies, the Euro was trading at a two-year low versus dollar. The Japanese Yen has jumped to the highest level as against the dollar since 1995.

This global meltdown has impacted the Indian markets quite sharply. The panic selling was seen from the local players. The domestic redemption led selloff was seen in the large cap stocks.

The 30-share BSE Sensex plunged 1,070.63 points or 10.96%, to settle at 8,701.07. It had plunged 1,204.88 points during the day and hit an intraday low of 8,566.82. The 50-share NSE Nifty closed down by 359.15 points or 12.20% at 2584, after touching intraday low of 2525.05. This is the lowest closing for the Sensex since November 24, 2005 and for the Nifty since November 14, 2005.

Raamdeo Agrawal of Motilal Oswal feels that it could take two years for the market to come back to normal. He said investors must exercise control and not go into panic mode.

The biggest butchered space in today’s session was the realty space; the Realty Index fell 24.39% or 562.31 points, to close at 1,743.27. The leader namely Unitech plunged 51.29% and DLF fell close to 24%. Puravankara Projects crashed 44.32% and Parsvnath was down 20.70%.

The BSE Oil & Gas Index lost 906.64 points or 14.97%, to settle at 5,151.64. Cairn India, Reliance Industries, Aban Offshore and ONGC fell 15-18.5%.

Metal stocks like NALCO lost 22.59%. Hindalco, Sterlite Industries, Tata Steel and SAIL fell 10.5-17.8%. BSE Metal Index closed down by 603.04 points or 12.07% at 4,393.88.

Auto Index fell 288.83 points or 10.43% to 2,480.96. Tata Motors and M&M fell over 16%. Maruti Suzuki lost 9.87%.

Capital Goods Index lost 633.97 points or 8.75%, to settle at 6,610.89. BHEL and L&T fell over 6.5% each.

Telecom stocks like Reliance Communication, Bharti Airtel, Idea Cellular and MTNL crashed 7-16%.

The BSE Healthcare Index plunged 252.97 points or 8.26% to 2,811.47. Glenmark, Ranbaxy Labs, Matrix Lab, Fortis Health, Orchid Chemical and Cipla fell 11.5-20%.

FMCG Index lost 118.62 points or 6.13%, to close at 1,817.91. Dabur India, United Spirits and HUL lost 7.5-10%.

The BSE IT Index fell 141.49 points or 5.16%, to settle at 2,598.31. Wipro, Tech Mahindra, TCS and HCL Tech plunged 8-13.6%.

The BSE Midcap Index closed down by 283.04 points or 8.38% at 3,095.68 and the BSE Small Cap Index crashed 303.87 points or 7.66% at 3,661.83.

Among the midcap stocks, IVRCL Infrastructure, UTV Software, Orbit Corporation, Parsvnath and Moser Baer fell 20-29%.

In the small cap space, Kalyani Steels, Suashish Diamon, Glodyne Tech, Seamec and Phillips Carbon lost 20-28%.

The market breadth was extremely weak; about 436 shares have advanced while 2568 shares have declined. Nearly 186 shares remained unchanged.

Total turnover traded on the exchanges stood at 67,895.45 crore. This includes Rs 11,148.12 crore from NSE Cash segment, Rs 52,476.62 crore from NSE F&O and the balance Rs 4,270.71 crore from BSE Cash segment.

Markets Snapshot

Asian Markets Clobbered:
Kospi dn 10.5%, Nikkei dn 9.6%, Strait Times dn 8.3%, Hang Sang dn 8.3%

Futures blasted:
Dow futures hit limit down; S&p 500 futures trade limit down

New 2008 lows:

Sensex hits a new low of 8566.82, Nifty hits a new low of 2525

Lowest Closing For Sensex Since Nov 24, 2005

Lowest Closing For Nifty since Nov 14, 2005

Worst Ever Weekly Performance For The Nifty

Sensex ends down 1070 points to close at 8701, Nifty ends down 359 points to end at 2584

BSE Realty dn 24.3%, Unitech dn 50%, Purvankara dn 45.4%, Orbit Corp dn 24.5%, DLf dn 23.6%, Parsvnath Dev dn 21.6%,

BSE Oil & Gas dn 15%, Reliance dn 16%, ONGC dn 15.2%, Essar Oil dn 19%, RPL dn 14%

Bse Bankex dn 12.6%, Kotak Bank dn 21%, Icici Bank dn 15.6%, Axis Bank dn 13.4%, SBI dn 12.1%, PNB dn 11.6%, Bank India dn 11.3%

Bse Metals dn 12%, Hindalco dn 17.4%, Sterlite dn 14.5%, Tata Steel dn 14.4%, Sail dn 10.6%

Index Losers : Suzlon dn 39.5%, Nalco dn 22%, Ranbaxy dn 18%, ABB dn 17%

Horrible Adv – Dec Ratio at 1:14

Total market turnover at Rs 67895.45 crore vs Rs 67918.19 crore

Nse F&O Turnover at Rs 52476.62 crore vs Rs 53624.95 crore

Market This Week

Sensex ends down 12.7%, Nifty ends down 16%

CNX Midcap Index down 12%, BSE Smallcap Index down 12%

BSE Metal Index down 24%; Nalco down 40%, Tata Steel down 28%, SAIL down 26%

BSE Oil & Gas Index down 20.5%; RIL down 22%, RPL down 25%

Index losers; Unitech down 61%, Suzlon down 45%, Idea down 41%

BSE IT Index up 2.4%; TCS up 10%, Satyam up 8%

F&O Snapshot:

75% of F&O stocks sell off more than 10%

Nifty futures see short rollovers pick up at 40% Oct and Nov slip into a major discount

Massive short buildup seen across the board

Short rollovers pick up in Banking stocks

Options Activity:

Nifty 2900 Oct Call adds 8.7 lakh shares

Nifty 3000 Oct Call adds 3.4 lakh shares

Fresh Short:

Metals: Tata Steel, Hindalco
Realty: DLF, Unitech ,
Banks: Kotak Mah Bank , ICICI Bank
Power: Power Grid, Suzlon
Misc: Cairn , HCC, RPL
Telecom: Idea , RComm

Asia Tumble
Kospi down 10.5% as Q3 GDP grew at the slowest pace in last 4 years
Nikkei down 9.6%; yen jumps to the highest level since 1995 against dollar to 90.89, investors unwind carry trades
Dow Jones, S&P 500 hits limit down

Global News
UK Economy 3Q GDP drop 0.5% (QoQ), first contraction since 1992
Belarus, Ukraine, Hungary and Iceland joined Pakistan in requesting at least $20 bn of emergency loans from IMF

Commodities/ Currencies
Gold falls below $700
Dollar hits 2-year high Vs Euro
Yen climbs to 13-year high against dollar at 90.89/$1
Pound fell to its lowest level in almost six years

WEEKLY PERFORMANCE

Last

Week

Weekly

Korea

939

1,180.00

-20.42%

Straits Times

1600

1,878.00

-14.80%

Hang Seng

12618

14,554.21

-13.30%

Sensex

8737

9,975.00

-12.41%

Nikkei

7649

8,693.82

-12.02%

Jakarta

1244

1399

-11.08%

Taiwan

4579

4,961.00

-7.70%

Shanghai

1839

1,930.65

-4.75%

Markets @ 2:49 pm : Nifty plunges 10%; Bank, Oil, Metal, Realty slip over 10%

Bears are hammering the benchmark indices quite sharply. The BSE Sensex is moving closer to 10% while the Nifty already crossed 10% on the lower side. Heavyweights are taking huge beating on the bourses, due to the global meltdown.

The selling pressure is coming in from the European funds. Some large Europe based funds are facing serious redemption pressure. The nibbling by domestic insurance companies is not supporting the market. Domestic redemption led sell off continued in large cap stocks. The panic selling by local players is adding to the pressure.

Among the frontliners, Suzlon Energy went down over 35%. Unitech lost 28% and Nalco crashed 24%.

Hindalco, ABB, Power Grid, PNB, Cairn India, Ranbaxy Labs, ONGC, Tata Motors, Tata Steel, Sterlite Industries, DLF, Maruti Suzuki, M&M, Reliance Industries, Reliance Infrastructure, SBI, Reliance Communication, HDFC Bank, ICICI Bank, and Tata Power plunged 10-20% on the Sensex.

The Nifty crashed 316 points to 2,626 and the Sensex fell 980 points to 8,791, at 2:49 pm. The BSE Midcap Index lost 7.6% and the Small Cap index fell 6.5%.

The BSE Realty Index slipped close to 15%. Bankex, Oil & Gas, Metal, Auto and Power Indices plunged 10-12%. Healthcare, Capital Goods and FMCG fell 6-9.5%.

Market breadth is extremely weak; about 458 shares have advanced while 2541 shares have declined. Nearly 191 shares are unchanged.

The Dow and Nasdaq Futures fell over 6% each. SGX Nifty tumbled over 12%. European markets are down 6-8%.

Markets @ 1:31 pm : Sensex below 9000; RIL, ONGC, Bharti, SBI drag

Bears are not giving any single chance to comeback and have weighed on the benchmark indices. The Sensex and the Nifty are struggling at the 9000 and 2700 levels, respectively. Banking, realty, metal, auto, oil and power stocks are taking huge beating on the bourses. Midcap and small cap stocks also plunged in line with other indices.

The negative flows has been continued at the FII desk. The long only funds are sellers across the Asia. Bank stocks are under pressure post the credit policy announcement, wherein the RBI has kept all key rates unchanged. Local players are selling their stocks desperately.

At 1:31 pm, the Sensex fell 822 points to 8,949 and the Nifty slipped 266 points to 2,676. The BSE Midcap and Small Cap indices fell nearly 6% each.

The BSE Bankex, Metal and Realty indices plunged 11-13%. Oil & Gas, Auto and Power fell over 8.5%. Healthcare and Capital Goods lost over 6% each.

Reliance Industries, HDFC Bank, SBI, ICICI Bank, HDFC, Bharti Airtel, ONGC, ITC, L&T, Reliance Communication and ONGC are top contributors to this fall.

Among the Asian markets; Kospi plunged 10.57% and Nikkei lost 9.6%. Straits Times and Jakarta fell over 7%. Hang Seng crashed nearly 6%. Shanghai and Taiwan fell 1.92% and 3.19%, respectively.

Sony Corporation and Amazon.com have cut their earning guidance due to lower consumer demand. The Japanese Yen rose 13-year high as against the US dollar.

European markets are trading sharply lower; CAC, DAX and FTSE lost 4-5%. Dow Jones and Nasdaq Futures slipped over 4% each.

Markets @ 12:24 pm : Sensex tests 9000; bank, metal, realty stocks crash

The market shattered after the RBI credit pollcy announcement. The Sensex has broken 9000 mark for the first times since June 14, 2006 and the Nifty also slipped below 2700. Metal, banking, realty, power, oil and auto stocks are extremely under pressure.

The market has disappointed with no rate cut in the credit policy. Banking stocks are reeling under selling pressure. The long only funds are selling across the region. The desperate sell off has been seen from local players. Domestic funds are nibbling at the lower levels. The sentiment is extremely weak on Asia sell off.

The Reserve Bank of India has announced the credit policy. It has kept all key rates unchanged. The GDP growth forecast has lowered to 7.5-7.8% as against 8% earlier. Inflation target remained unchanged at 7% by March end. The credit growth stood at 29% currently but the RBI has kept target of 20%.

At 12:24 pm, the Sensex declined 731 points to 9,032 and the Nifty slipped 242 points to 2,700. The BSE Midcap and Small Cap indices fell at around 5% each.

BSE Metal, Realty, Bankex, Power, Oil & Gas, Auto and FMCG indices tumbled 7-10%. Capital Goods plunged nearly 6% and IT lost 4%.

Among the frontliners, Hindalco, Nalco and Suzlon Energy fell 20-23%. M&M, Tata Steel, Ranbaxy Labs, Tata Motors, Reliance Infrastructure, ONGC, Sterlite Industries, Reliance Communication, Zee Entertainment, Unitech, Power Grid Corp and Idea Cellular lost 11-17%.

European markets are down 4-5.5% in opening trade. Asian markets lost 3-9%.

Mkts @ 11:08 am : Nifty tests 2800; metal, realty, power, auto stocks plunge

The market is reeling extremely under pressure. The BSE Sensex is trading below 9500 mark and the Nifty has tested 2800 level. Asian markets have plunged further, down 3-9%, which is putting presure on our markets.

The selling is seen in metal, realty, power, pharma, auto, oil & gas and midcap stocks. Not a single stock is in the green in both indices.

The Reserve bank of India (RBI) has kept repo rate and SLR unchaged.

At 11:08 am, the Sensex slipped 347 points to 9,424 and the Nifty fell 124 points to 2,818. The BSE Midcap and Small Cap indices lost over 2-3%.

The market breadth is extremely weak; about 721 shares have advanced while 2255 shares have declined. Nearly 214 shares are unchanged.

Among the frontliners, Suzlon Energy, Hindalco, NALCO, Unitech and Sterlite Industries fell 10-19%. Power Grid Corp, M&M, Ranbaxy Labs, HDFC and Tata Motors lost 7-9%.

BSE Metal Index fell over 7%. Healthcare, Auto, Realty, Power, Capital Goods, Oil and TECK indices lost 3-5%.

Markets @ 10:24 am : Sensex below 9500; Hindalco, Sterlite, Bharti top losers

The market has extended losses further on account of huge selling in metal, realty, auto, pharma and banking stocks. Asian markets are extremely under pressure. Midcap and small cap stocks are also down.

The Sensex tumbled 320 points to 9,451 and the Nifty lost 115 points to 2,828, at 10:24 am. The BSE Midcap Index fell 2% to 3,311 and the Small Cap Index lost 1.23% to 3,917.

After months of the financial crisis gripping the developed countries, the fear is now spreading to emerging markets. Countries in Eastern Europe as well as Pakistan are reeling under the possibility of sovereign defaults. Bhanu Baweja, Head – Global Emerging Market Research of UBS feels our capital markets are globalised, and even economy to a very large extent is more globalised today, than it was ten years back. Thus emerging markets will come down with the global economy, just as they went up with it.

Market breadth is very weak; about 835 shares have advanced while 2136 shares declined. Nearly 219 shares are unchanged.

Among the fronliners, Suzlon Energy fell 19.26%. NALCO, Hindalco, Unitech and Sterlite Industries lost 10-16%. Power Grid Corp, Idea Cellular, Bharti Airtel, HDFC Bank, Tata Motors and Tata Steel plunged 5-9%. Not a single stock is in the green on the Sensex and the Nifty.

The BSE Metal Index slipped nearly 7%. Realty Index plunged 5%. Healthcare, Auto, Bankex, Power, Oil & Gas and TECK fell 3-4%.

Markets @ 10:04 am : Mkts plunge on weak Asian cues; Sensex tests 9500

The market has been continued to trade sharply lower and has opened with sharp cut in the early trade. This fall is due to the weak trend in the Asian markets. Selling is seen metal, realty, banking, telecom, capital goods, oil and auto stocks.

At 10:04 am, the Sensex fell 216 points to 9,555 and the Nifty tumbled 74 points to 2,868. The BSE Midcap index lost 1.4% to 3,332.

ONGC, Bharti Airtel, Reliance Industries, SBI, HDFC Bank, Power, Grid Corp, DLF, TCS, NTPC, HDFC Bank, ICICI Bank, Reliance Communication and Infosys are major contributors to this fall.

Tata Steel fell another 6%, as the S&P has downgraded its UK outlook to stable from positive.

Glenmark Pharma tumbled over 12%. Glenmark and Eli Lily suspended Osteoarthritis Molecule development.

Asian markets are trading sharply lower. Nikkei, Kospi, Straits Times, Hang Seng and Jakarta tumbled 5-9%. Taiwan and Shanghai lost 3% and 0.68%, respectively.

After three attempts at a rally the Dow finally managed to eke out 2% gains in late trade.The Nasdaq though shed 11 points as some of the biggest names on the index were pummeled by a weak outlook for the consumer. The S&P 500 meanwhile closed with gains of a percent and a half. The Dow advanced 172.04 points, or 2.02%, to 8,691.25. The S&P 500 index gained 11.33 points, or 1.26%, to 908.11, and the Nasdaq slipped 11.84 points, or 0.73%, to 1,603.91.

Market cues:

FIIs net sell USD 67.7 million in equity

MFs net buy Rs 17.5 crore in equity

RBI monetary policy today, street expects SLR cut

SEBI didn’t issue directive to FIIs to unwind existing positions: Sources

SEBI doesn’t want fresh positions, still collating data: Sources

Finmin sources say FIIs must unwind positions taken after Oct 20

F&O cues:

NSE F&O Open Int down by Rs 1618 crore at Rs 69806 crore

Futures Open Int down by Rs 3259 crore, Options Open Int up by Rs 1641 crore

Stock futures shed 40 lakh shares in Open Int

Nifty Oct at 9-point discount, Nov at 5-point discount

Nifty futures net add 3 lakh shares in Open Int, rollover at 37%

Nifty Open Int PCR at 0.71 vs 0.73

Nifty Puts add 1.3 lakh, Calls add 24 lakh shares in Open Int

Nifty 2900 Put adds 4.5 lakh shares in Open Int

Nifty 3200 Put sheds 1.7 lakh shares in Open Int

Nifty 2900 Call adds 9.4 lakh shares in Open Int

Nifty 3000 Call adds 7.2 lakh shares in Open Int

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