The market slumped in the afternoon trade extending an earlier fall triggered by weak industrial production data for May 2008. Capital goods stocks fell after the industrial production data showed that growth in capital goods sector declined sharply in May 2008 over May 2007. IT stocks slipped after IT bellwether Infosys said at the time of announcing Q1 June 2008 results today that the business environment was tough. All the sectoral indices on BSE were in negative territory
European markets, which opened after Indian markets, were mostly in green. Key indices in UK and France were up 0.31% to 0.53%. However, Germany's DAX index was down 0.21%.
Asian market which opened before Indian market rose, boosted by a report that the US government is weighing the takeover of top US mortgage lenders Fannie Mae and Freddie Mac which have been under fire on fears they may not be able to get the capital they need to survive. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.87% to 2.39%. China's Shanghai Composite index was down 0.65%.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released today, 11 July 2008, afternoon showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Inflation based on the wholesale price index rose 11.89% in 12 months to 28 2008, above the previous week's annual rise of 11.63%, government data released today, 11 July 2008, afternoon showed. It was the reading since annual numbers in the current series became available in April 1995.
At 13:20 IST, the 30-share BSE Sensex was down 359.76 points or 2.58% at 13,566.48. It shed 394.97 points at the days low of 13,531.27 hit in early afternoon trade. At the days high of 14,066.36, the Sensex gained 140.12 points at the onset of trading session.
The broader based S&P; CNX Nifty was down 83.60 points or 2.01% at 4078.60.
The BSE Mid-Cap index was down 1.11% at 5,414.24, while the BSE Small-Cap index was down 0.60% at 6,768.41.
The market breadth was weak on BSE, with 1443 losers outpacing 986 gainers. 86 stocks remained unchanged.
Capital goods shares dipped. Bharat Heavy Electricals (down 4.47% at Rs 1,493.20), Larsen & Toubro (down 4.41% at Rs 2,420), Suzlon Energy (down 4.15% at Rs 199.70), Punj Lloyd (down 4.14% at Rs 216.30), and ABB (down 3.79% at Rs 869.90), tumbled.
IT stocks extended losses. Satyam Computer (down 5.92% at Rs 450.55), TCS (down 5.64% at Rs 820), and Wipro (down 3.25% at Rs 417), fell sharply.
India's second largest software exporter by sales Infosys Technologies slipped 4.60% at Rs 1,723.05. Infosys today reported 4.2% growth in consolidated net profit to Rs 1302 crore in Q1 June 2008 over Q4 March 2008. Revenue rose 6.8% to Rs 4854 crore in Q1 June 2008 over Q4 March 2008.
Infosys has revised upwards earnings and revenue guidance for the year ending March 2009 (FY 2009). Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
However, Infosys has not revised its earnings as well as revenue guidance in dollar terms i.e. as per US GAAP, which means that the upward revision in earnings and revenue guidance as per Indian GAAP is just due to a sharp fall in rupee against the dollar.
Reliance Infrastructure (down 4% at Rs 820.90), Housing Development Finance Corporation (down 3.99% at Rs 2033), and Tata Steel (down 3% at Rs 678), were the other prominent losers from the Sensex pack.
Among the Sensex gainers were, Ambuja Cements (up 2.03% at Rs 80.40) and Tata Motors (up 0.60% at Rs 401.75).
Indias top cellular service provider by sales Bharti Airtel rose 0.84% at Rs 747.95. It came off early high of Rs 798.65. As per reports, the company added 2.56 million users in June 2008, taking its total user base to 69.4 million.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries declined 0.87% at Rs 2026.10.
Indias largest private sector bank by market capitalization ICICI Bank declined 3.74% at Rs 593.70.
US stocks rose on Thursday, 10 July 2008, helped by optimism about a major deal in the chemicals sector and after the Federal Reserve chairman said the central bank and the government are focused on stabilizing the financial system. The Dow Jones Industrial Average rose 81.58 points or 0.73% at 11,229.02. The tech-laden Nasdaq Composite index rose 22.96 points or 1.03% to 2,257.85.
As per provisional data, foreign funds on Thursday, 10 July 2008, sold shares worth a net Rs 551.67 crore. Domestic funds sold shares worth a net Rs 112.46 crore.
Caution may prevail on the bourses in the near term due to political uncertainty as to whether the government will be able to win confidence vote in the parliament. Reports suggest that government may hold a special session of parliament shortly to seek vote of confidence following withdrawal of support to the government by Left front this week.
The government is confident of retaining power due to backing from Samajwadi Party, a regional party in Uttar Pradesh. Samajwadi Party (SP) yesterday, 8 July 2008, said it will vote with the government in support of the nuclear deal with the United States. Left has withdrawn support to protest Indo-US nuclear deal.
High crude oil prices is another major worry for the stock market. US crude oil gained $5.60 to settle at $141.65 a barrel amid threats to production in Nigeria and Brazil and an additional missile test by Iran.
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