Fears of further spike in inflation post today's fuel price and weak global markets caused bloodbath on the bourses. The market witnessed choppy swings throughout the day. All sectoral indices on BSE suffered 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. Negative global cues dampened early start. Public sector oil marketing companies stocks fell after the initial firmness.
At 13:27 IST, the 30-share BSE Sensex was down 378.90 points or 2.37% at 15,578.77. Sensex gained 30.34 points at its high of 15992.90 hit in early trade. It lost 398.58 points at day's low of 15,563.98, touched in mid-afternoon trade.
The broader based S&P; CNX Nifty was down 106.5 points or 2.26% at 4,609.40.
The BSE Mid-Cap index down 1.79% to 6429.90 and BSE Small-Cap index down 1.43% to 7,769.74. Both these indices outperformed Sensex.
Government agreed to raise its petrol and diesel prices by about 10% today, more than expected, curbing losses at its state-owned refiners but 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.
The market breadth was weak on BSE with 726 shares advancing as compared to 1831 that declined. 70 remained unchanged.
Among the 30-member Sensex pack, 29 declined while the rest gained.
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) fell 0.83% to Rs 2384.80. It recovered from day's low of Rs 2365.05.
Capital goods stocks declined. Suzlon Energy (down 3.54% to Rs 249.20), Larsen & Toubro (down 2.88% to Rs 2767) and Bharat Heavy Electricals (down 4.3% to Rs 1481.95) edged lower.
Metal stocks declined. Sterlite Industries (down 7.75% to Rs 832), Sesa Goa (down 7.46% to Rs 3622.30), National Aluminium Company (down 3% to Rs 472), Tata Steel (down 3.74% to Rs 829.50), Hindalco Industries (down 1.44% to Rs 181.55), Steel Authority of India (down 1.69% to Rs 153.75), edged higher.
Auto stocks were subdued post oil price hike announcement. Maruti Suzuki India (down 5.91% to Rs 740), Hero Honda Motors (down 4.26% to Rs 764), Mahindra & Mahindra (down 3.2% to Rs 571.50), Tata Motors (down 4.61% to Rs 544) and Bajaj Auto (down 4.91% to Rs 551.60) edged lower.
Power stocks declined. Reliance Power (down 5.03% to Rs 207.65), Tata Power Company (down 3.94% to Rs 1,205), Reliance Infrstructure (down 3.92% to Rs 1080.10), Powergrid Corporation of India (down 2.86% to Rs 88.35) edged lower.
State run oil & gas stocks pared gains after fuel price hike. BPCL (down 4.15% to Rs 336), Indian Oil Corporation (up 1.91% to Rs 426.75), HPCL (up 0.24% to Rs 248) 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.
ONGC rose 5.67% to Rs 890.05 and was the lone gainer from Sensex pack.
However HDFC Bank (down 5.97% to Rs 1,206), Ambuja Cements (down 4.05% to Rs 88.70), DLF (down 3.85% to Rs 560), Reliance Communications (down 3.3% to Rs 54.70), Infosys (down 3.05% to Rs 1864.700) edged lower from Sensex pack.
European markets which opened after Indian markets were weak. Key benchmark indices from France, Germany and UK were down by between 1.35% to 2.01%.
Asian markets were trading mixed today, 4 June 2008. Nikkei 225 index Taiwan's Taiwan Weighted, South Korea's Seoul Composite and 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.
Back home, the market staged a smart intra-day rebound in second half of the days trading session yesterday, 3 June 2008, led by recovery in Reliance Industries (RIL). Panic selling in early trade by wary investors kept market depressed in the first half. The 30-share BSE Sensex settled 100.62 points or 0.63% lower at 15,962.56 and the broader based S&P; CNX Nifty fell 23.70 points or 0.5% at 4,715.90, on that day.
As per provisional data, foreign funds sold shares worth a net Rs 1020.70 crore yesterday, 3 June 2008. Domestic funds bought shares worth a net Rs 262.49 crore on that day.
Foreign institutional investors (FIIs) were net sellers of Rs 858.65 crore in the futures & options segment yesterday, 3 June 2008. They were net sellers of index futures to the tune of Rs 1394.78 crore and bought index options worth Rs 548.79 crore. They were net sellers of stock futures to the tune of Rs 96.59 crore and bought stock options worth Rs 83.93 crore.
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).
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