Market stays under pressure for third straight day

Local benchmarks stayed under pressure for third straight day today marred by fears of further spike in inflation to a multiyear high post fuel price hike announced during the day. Weak global markets also played the spoilsport. The market witnessed choppy swings throughout the day. Stocks across the board were hammered brutally with all sectoral indices on BSE suffering losses.

The market had witnessed a short lived recovery in early afternoon trade soon after the Cabinet Committee on Political Affairs (CCPA) approved the long awaited hike in fuel prices.

The 30-share BSE Sensex tumbled 447.77 points or 2.81% at 15,514.79. The barometer index swung wildly in a range of 550.56 points between the day's high and low of 15,992.90 and 15,442.34 respectively.

The BSE Sensex has now eroded 900.78 points or 5.48% from 16,415.57 in just three trading days.

The Sensex has now slumped 5691.98 points or 26.84% from its all time high of 21,206.77, struck on 10 January 2008. However it is still up 705.3 points or 4.76% from its recent low of 14,809.49 touched on 17 March 2008.

The broader based S&P CNX Nifty was down 130.3 points or 2.76% at 4,585.60. Nifty June 2008 futures were at 4580.50, a discount of 5.10 points as compared to spot closing.

The BSE Mid-Cap index down 2.29% to 6397.37 and BSE Small-Cap index down 2.06% to 7,720.26. Both these indices outperformed Sensex.

The market breadth was weak on BSE with 676 shares advancing as compared to 1967 that declined. 76 remained unchanged.

The BSE clocked the turnover of Rs 5,551 crore today as compared to Rs 5,252.69 crore on 3 Jun 2008.

The NSE futures & options (F&O) segment turnover was Rs 48,378.31 crore, which was higher than Rs 40,448.71 crore on Tuesday, 3 June 2008.

Among the sectoral indices on BSE, the BSE Realty index (down 5.01% at 6,389.20), BSE Metal index (down 4.98% to 15,423.15), BSE Power (down 4.42% to 2,632.37), The BSE Oil & Gas index (down 3.39% to 10,059.51), BSE Auto (down 3.31% at 4,225.59), BSE Capital Goods index (down 3.24% at 12,115.82), BSE Consumer Durables index (down 3.14% to 4,089.71) underperformed Sensex.

However the BSE FMCG index (down 1.5% to 2,367.45), BSE PSU index (down 1.93% to 6,598.43), BSE Health Care index (down 2.19% at 4,264.93), BSE Bankex (down 2.53% at 7,210.37), BSE IT ndex (down 2.54% to 4,397.35), BSE TecK index (down 2.67% to 3,407.94), outperformed the Sensex.

In a crucial development, government today agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms.

Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.

Among the 30-member Sensex pack, 29 declined while India's largest oil exploration company in terms of market capitalisation ONGC was the lone gainer. The stock surged 5.31% to Rs 887.05 on speculation that it may have to absorb lower subsidy burden after today's fuel price hike.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) sumped 4.14% to Rs 2296.70.

India's largest real estate developer in terms of market capitalisation DLF shed 4.7% to Rs 555.10. The company’s net profit rose 536.6% to Rs 2590.28 crore on 388.1% rise in sales to Rs 5532.88 crore in FY 2008 over FY 2007.

Metal stocks declined. Sterlite Industries (down 6.71% to Rs 841.40), Sesa Goa (down 8.83% to Rs 3568.70), National Aluminium Company (down 1.71% to Rs 478.30), Tata Steel (down 5.36% to Rs 815.60), Hindalco Industries (down 3.09% to Rs 178.60), Steel Authority of India (down 1.69% to Rs 153.75), edged lower.

Power stocks declined. Reliance Power (down 7.31% to Rs 202.80), Tata Power Company (down 7.06% to Rs 1,165.85), Reliance Infrstructure (down 4.89% to Rs 1070.10), Powergrid Corporation of India (down 2.97% to Rs 88.30) edged lower.

Realty stocks slumped. Lanco Infratech (down 12.27% to Rs 416.50), Indiabulls Real Estate (down 7.29% to Rs 412.05) and Unitech (down 5.52% to Rs 207.20) edged lower.

State run oil & gas stocks erased early gains to post losses despite fuel price hike. BPCL (down 7.84% to Rs 324.05, off day's high of Rs 371.60), Indian Oil Corporation (down 3.61% to Rs 418.20, off day's high of Rs 452.90), HPCL (down 2.9% to Rs 241.40, off day's high of Rs 259.90) edged lower.

The OMCs have so far reported losses of over Rs 2.25-lakh crore due to the high crude prices and in the absence of revision in the domestic retail prices. They have said they will run out of cash to import crude if the government fails to bail them out.

Auto stocks were subdued post oil price hike announcement. Hero Honda Motors (down 4.26% to Rs 764), Mahindra & Mahindra (down 3.2% to Rs 571.50), Tata Motors (down 4.87% to Rs 542.50), Maruti Suzuki India (down 5.07% to Rs 746.55), and Bajaj Auto (down 4.91% to Rs 551.60) edged lower.

Ambuja Cements (down 5.46% to Rs 87.50), HDFC Bank (down 5.19% to Rs 1,215.95), Bharat Heavy Electricals (down 4.99% to Rs 1471.25), DLF (down 3.85% to Rs 560), edged lower from Sensex pack.

IFCI clocked the highest volume of 1.78 crore shares on BSE. Reliance Petroleum (1.56 crore shares), Ispat Industries (1.38 crore shares), Reliance Natural Resources (95.34 lakh shares) and Essar Oil (91.05 lakh shares) are among other volume toppers in that order.

ONGC clocked the highest turnover of Rs 313.48 crore on BSE. Reliance Industries (Rs 308.80 crore), Reliance Petroleum (Rs 268.68 crore), Essar Oil (Rs 220.61 crore) and Reliance Capital (Rs 216.73 crore) are among other turnover toppers in that order.

Anu’s Laboratories settled at a premium of 27.64% at Rs 268.05 on its debut on BSE. It had fixed the offer price of Rs 210.

Gokul Refoils and Solvent settled at a discount of 7.15% to Rs 181.05 on its debut on BSE. It had fixed the offer price of Rs 195.

European markets which opened after Indian markets were weak. Key benchmark indices in France, Germany and UK were down by between 1.42% to 2.16%.

Asian markets were trading mixed today, 4 June 2008. Key Asian indices - Nikkei 225 index, Taiwan's Taiwan Weighted, South Korea's Seoul Composite rose between 0.56% to 1.59%.

However, Singapore's Straits Times, Hang Seng and China's Shanghai Composite were down by between 0.83% to 1.93%.

US markets declined in volatile session yesterday, 3 June 2008 led by growing speculation that Lehman Brothers will be forced to raise more capital and a drop in oil prices pushed down energy companies. The Dow Jones industrial average declined 100.97 points, or 0.81%, to 12,402.85. The S&P 500 index slipped 8.02 points, or 0.58%, to 1,377.65, while the Nasdaq Composite index was down 11.05 points, or 0.44%, to 2,480.48.

US light crude for July delivery fell 34 cents to $123.97 a barrel today, 4 June 2008, triggered by a rallying dollar as traders awaited U.S. data expected to show rising oil stocks. London Brent crude for July delivery fell 38 cents to $124.20 a barrel.

Meanwhile, mutual funds have reportedly managed to increase their assets under management (AUM) by 5.36% in May 2008, helped by fresh investments in fixed income funds. The collective AUM rose by 30,576.72 crore in May 2008, according to the data released by the Associations of Mutual Fund in India (AMFI).