Key benchmark indices extended losses for the third straight day as bears hammered stocks brutally across the board. Weak global cues, concerns about the fallout from the credit crisis and political uncertainty caused the heavy sell-off. BSE Sensex today hit its lowest level in 15 months.

Fears of more failures of small banks in the United States after last weeks collapse of US mortgage lender IndyMac Bancorp Inc, roiled equities across Asia and Europe today.

All the sectoral indices on BSE posted losses. Shares from banking, capital goods and metal sectors collapsed. Ranbaxy Labs plunged on high volumes for the second straight day. The market breadth was weak.

In Europe key benchmark indices in UK, Germany and France were down by between 1.45% and 1.93%. In Asia, key benchmark indices in China, Japan, Hong Kong, Taiwan, Singapore and South Korea were down by between 2.11% and 4.51%.

The 30-share BSE Sensex plunged 717.74 points or 5.38% at 12,612.77, as per provisional closing. It lost 725.51 points at the day's low of 12,605, hit in late trade, a 15-month low. The Sensex opened with a downward gap of 263.43 points.

The broader based S&P; CNX Nifty tumbled 202.50 points or 5.01% at 3,837.20 as per provisional closing.

The market breadth was weak on BSE with 2091 shares declining as compared to 540 that advanced. 59 remained unchanged.

The BSE Mid-Cap index was down 3.39% to 5,150.20 and the BSE Small-Cap index fell 3.21% to 6,426.82, as per provisional closing. Both these indices outperformed the Sensex.

All the 30-members from the Sensex pack edged lower.

Indias largest pharma company in terms of sales Ranbaxy tumbled 14.90% to Rs 405 on high volumes of 71.66 lakh shares. It was the top loser from the Sensex pack. As per foreign brokerage house UBS, the stock could erode 50% if the deal with Daiichi is called off. The stock continued to suffer losses for the second straight day after plunging 10.86% yesterday on reports the US government has levelled serious allegations against the company.

The US department of justice (DoJ) has said that there was evidence to suggest that Ranbaxy used active pharmaceutical ingredients (API) from unapproved sources, blended unapproved API with approved API, and used less-than-approved API at its Paonta Sahib (Himachal Pradesh) plant in its drugs, resulting in the sale of subpotent, super- potent or adulterated medicines in the US market. Ranbaxy has strongly denied the allegations raised by the US Department of Justice (DOJ).

The Bankex tumbled 8.39% to 5,469.85 and was the biggest loser among the sectoral indices on BSE. The banking index had hit 52-week low of 5437.7 touched on 2 July 2008.

Indias second largest private sector bank in terms of net profit HDFC Bank plunged 11.47% to Rs 914.25. Indias largest private sector bank in terms of net profit ICICI Bank tumbled 9.11% to Rs 527, off its 52-week low of Rs 525 hit in intra-day trade.

Indias largest state-run bank in terms of net profit State Bank of India lost 7.93% to Rs 1158. The bank has reportedly recovered Rs 2000 crore in bad loans during April-June 2008 period.

Even though Indian banks have little exposure to the US housing sector, sentiment in the sector across the globe is at an all-time low, and India is no exception. The likely hood of another interest rate hike in light of the inflation situation only makes matters worse for Indian banks.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries was down 3.75% at Rs 1,970.

Metal shares slipped on selling pressure. Hindalco (down 8.10% to Rs 138.40), Hindustan Zinc (down 6.87% to Rs 542), Sterlite Industries (down 6.42% to Rs 639.30), Tata Steel (down 5.72% to Rs 645), and Steel Authority of India (down 5.52% to Rs 131.75), slumped.

Real estate stocks cracked on renewed selling. DLF (down 5.48% to Rs 430.80), Unitech (down 6.81% to Rs 152.50), Purvankara Projects (down 7.04% to Rs 166.95), and Omaxe (down 6.16% to Rs 121.05), slumped.

Bharat Heavy Electricals (down 6.95% to Rs 1368), Larsen & Toubro (down 4.97% to Rs 2272.70), Reliance Infrastructure (down 7.45% to Rs 757) and HDFC (down 7.39% to Rs 1790) edged lower from the Sensex pack.

Indias largest cellular services provider in terms of market capitalisation Bharti Airtel lost 4.66% to Rs 702.50. South African mobile phone operator MTN Group has reportedly sent feelers to Bharti Airtel for reviving talks, if it fails to clinch a deal with Reliance Communications.

Reliance Communication, the countrys second largest cellular services provider in terms of market capitalisation plunged 7.92% to Rs 403.05.

IT pivotals pared gains after firm start. Infosys Technologies (down 1.25% to Rs 1536.45, off days high of Rs 1578.65), TCS (down 3.50% at Rs 742, off days high of Rs 785), Wipro (down 7.88% at Rs 372.55, off days high of Rs 409.95), and Satyam Computer Services (down 2.26% to Rs 400, off days high of Rs 424.85), pared early gains.

Ranbaxy Laboratories was the top traded counter on BSE with turnover of Rs 303.91 crore followed by Reliance Industries (Rs 278.82 crore), Reliance Capital (Rs 261.05 crore), Infosys (Rs 168.11 crore), in that order.

Fitch Ratings today, 15 July 2008, lowered India's domestic rating outlook to negative from stable due to the central government's worsening fiscal position. Fitch has maintained the country's BBB-minus rating for both its local currency rating and its foreign currency rating.

Oil prices hovered around $145 per barrel today, 15 July 2008, close to its record high of $147.27 set on Friday, 11 July 2008.

US stocks tripped yesterday, 14 July 2008, as concerns on the health of the US banking sector mounted after the collapse of IndyMac eclipsed the earlier optimism over the government's plan to stabilise mortgage lenders Fannie Mae and Freddie Mac. The Dow Jones industrial average slipped 45.35 points, or 0.41%, to 11,055.19. The Standard & Poor's 500 index declined 11.19 points, or 0.90%, to 1,228.30, and the Nasdaq Composite index lost 26.21 points, or 1.17%, to 2,212.87.

Back home, the Manmohan Singh government suffered another setback on Monday, 15 July 2008, on reports that at least two important leaders it was counting on for support in the trust vote seemed to be backing off. The two leaders are the Telengana Rashtra Samiti (TRS) chief Chandrashekhar Rao, and the other is DMKs Dayanidhi Maran. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.

India-dedicated funds saw $944 million outflows in the month to 9 July 2008, the highest redemption faced by any country-specific funds group in the period, according to EPFR Global data. Redemptions have continued for five weeks in a row leading the Indian benchmark indices to their lowest levels in 15 months. In the week ended 9 July 2008, India-dedicated funds saw an outflow of $215 million, again the highest by any country fund category.

Indian markets also reportedly bore the brunt of redemption from Asia regional funds, which have considerable allocations to Indian markets.

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