The market suffered a sharp fall today and one of the worst setback in recent months, as investors resorted to booking profits across the counter after a seven week winning run. Weak Asian markets and concerns over a possible hike in interest rates brought back the bears, who had been waiting for an opportunityto spring back into action. Heavy selling by FIIs in the derivatives segment since the last two days has dampened market sentiment. Foreign investors pulled out Rs 1,660 crore from the derivatives segment on Thursday (7 September 2006) & Friday (8 September 2006). In the cash segment, there was a net FII outflow to the tune of Rs 65.20 crore during the same two sessions. As the bears kept trampling down stocks cutting across sectors, the market never really had any chance to smile. The BSE Sensex plunged 367.96 points (3%), to settle at 11,550.69. The S&P CNX Nifty tanked 105.30 points (3%), to end on 3,366.15. The heavy FII saling in the derivative market has materialized at a time when the market was hovering around key resistance level. Though market men were expecting a correction in share prices after a steady and sustained rise since late July 2006, but the sharp fall was not what the street had anticipated. While the rise on the bourses was on a steady basis over the past couple of months or so, the fall of 368 points which materialised in a single trading session today was quite sharp and swift. From a low of 10,085.91 on 21 July, the Sensex had risen 1,832.74 points (18.1%) in little less than two months to 11,918.65 points, on 8th September. After opening on a positive note at 11,959.56 points, the Sensex had hit a high of 11,971.60 points in early trade this morning. For the BSE barometer, this is the biggest single session loss since it went down by 385 points to 10, 293.22 on July 17, 2006. After a positive opening, the market kept falling throughout the day, which was only precipitated in the last 90-minutes of trade. At one point of time in late trading, the Sensex had plunged over 400 points to a low of 11,505.60. A recovery in index heavyweight Reliance Industries (RIL) helped it to climb a bit. On a closing basis, it was the biggest fall in the Sensex in a single trading session since 17 July 2006, the day when the barometer index had tanked 385 points on weak global markets. Indian bourses were the worst performers compared to other key Asian and European markets today. Key benchmark indices in Hong Kong, Japan, South Korea and Singapore were down by between 0.8 - 1.7% today. In Europe, key benchmark indices in London, Germany and France were down by 0.7% each. It was a free fall for stocks cutting across sectors. Though metal stocks were the ones to begin the slide - the BSE Metal index went down by as much as 5.05% today -, shares from auto, capital goods, FMCG, information technology, oil, PSU and banking sectors started turning down south by noon. Two wheeler maker Hero Honda (up 1.3% to Rs 745.25) was the lone gainer in the Sensex today. Among Nifty stocks, besides Hero Honda, Jei Airways (up 0.6%) was the one to end on a positive note today. The market breadth weakened substantially and when trade ended, out of 2568 stocks traded on BSE, as many as 1971 stocks had slipped into the negative terrain. 551 stocks managed to romp home on a winning note while 46 stocks finished unchanged from their previous closing levels. Losers outpaced gainers by a ratio of 3.67:1. Indian bourses were the worst performers compared to other key Asian and European markets today. Key benchmark indices in Hong Kong, Japan, South Korea and Singapore were down by between 0.8 - 1.7% today. In Europe, key benchmark indices in London, Germany and France were down by 0.7% each. Oil prices dipped under $66 a barrel, their lowest since April, 2006, amid growing US inventories and expectations that OPEC will keep production steady at high rates this year. The BSE clocked a turnover of Rs 3,390 crore, compared to Friday (8 September)’s Rs 3,459 crore. Metal stocks tanked and a host of blue-chips came under pressure. Among frontline stocks, Tata Motors plunged 6% to Rs 840, Tata Steel lost 5.9% to Rs 493.50, Hindustan Lever lost 4.9% to Rs 228.95, ACC shed 4.9% to Rs 898.95, Cipla shed 4.6% to Rs 245, Gujarat Ambuja Cements shed 4.4% to Rs 110, HDFC Bank lost 3.7% to Rs 818, Infosys shed 3.6% to Rs 1,729 and Reliance Industries shed 2.7% to Rs 1,099. Metal scrips were massacared after a fall in global metal prices. Hindustan Zinc plunged 8.4% to Rs 599.10, Sterlite Industries plunged 8% to Rs 435.50, Hindalco shed 6% to Rs 172.40, and Nalco lost 5% to Rs 201. Steel major Tata Steel plunged 5.9% to Rs 493.50. I had mentioned what one should in case of Hindustan Zince in case of a correction. But what I feel is that it is just a simple correction in the metal counter after a long summer. The metal prices bounced back more than 10% in the recent week after they were beaten down in the last meltdown. Select stocks survived the market meltdown. Blue Star was up 6.6% to Rs 723.65, Alembic Glass rose 5% to Rs 2,090.15, after the reports that it has huge and land bank in Bangalore and it is coming up with an Open offer. I recommended the stock on last Friday. Hercules Hoists jumped 10%, to Rs 2,649.50, Jindal Drilling gained 5% to Rs 319.60, Phillips Carbon Black gained 5% to Rs 76.15, Rishi Laser rose 4.6% to Rs 78.50, Machino Plastics rose 4% to Rs 59.60, Subhash Projects gained 3.9% to Rs 144, Orient Paper gained 3.3% to Rs 537 and Bakrishna Industries advanced 3% to Rs 557.50. Hotel Leelaventure rose 4% to Rs 73. The stock rose on a huge volume of 92.6 lakh shares on BSE. This is because the demand for the hotel rooms are outstripping supply. Exide Industries gained 2.2% to Rs 46.30. The scrip rose on heavy volume of 38.3 lakh shares on BSE. Both Hotel Leelaventure and Exide had effected stock-splits late last week. United Western Bank jumped 5% to Rs 22.05, extending its recent surge. A number of banks besides the Maharastra government-owned SICOM have submitted bids to revive the ailing private sector bank serving an RBI moratorium. LML dropped 20% to Rs 14.80 after its board of directors decided to refer the company to the Board for Industrial and Financial Reconstruction. Birla VXL gained 0.8% to Rs 117.65. The stock came off the higher level after having jumped 10%, to a high of Rs 128.32. Volume in the scrip was a huge 61.1 lakh shares on BSE. HMT plunged nearly 14%, to Rs 73.60. Heavy selling was witnessed in the midcap and smallcap space too. Mirroring the sharp fall in values of stocks in these segments, the BSE Midcap and Smallcap indices lost 3.21% and 3.15% respectively. [With Inputs from the Internet] More in the following posts.......tomorrow outlook will be presented later if the Internet and Power does not play traunt. Best wishes, Suman Mukherjee India.
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