The record high crude prices and weak global markets created havoc on the domestic markets with Sensex tanking more than 500 points in early trade. All the sectoral indices on BSE were in red. Realty, power and auto stocks were hit hard. The S&P; CNX Nifty fell below 4500 mark.

Oil prices surged by their biggest real one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year's gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.

US stocks plunged on Friday, 6 June 2008, marking the Dow's worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation. The Dow Jones industrial average tanked 394.64 points, or 3.13% to end at 12,209.81, its biggest drop since February 2007. The S&P; 500 slid 43.37 points, or 3.09%, to finish the day at 1,360.68. The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56.

In Asia, key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 1.42% to 2.05% today. Markets in China, Hong Kong and the Philippines were closed for public holidays. Oil prices surged by their biggest one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year's gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.

At 10:22 IST, the 30-share BSE Sensex was down 500 points or 3.21% at 15,072.19. At the days low of 15058.78 the Sensex lost 513.4 points in early trade.

The broader based S&P; CNX Nifty was down 141.8 points or 3.06% at 4,486.

The market breadth was extremely weak on BSE with 193 shares advancing as compared to 1622 that declined. 22 remained unchanged.

Among the 30 stocks from Sensex pack were trading in red.

Realty stocks declined. Unitech (down 6.43% to Rs 190.65), Indiabulls Real Estate (down 6.1% to Rs 398.25) and DLF (down 4.99% to Rs 494) edged lower.

Power stocks fell. Reliance Infrastructure (down 4.8% to Rs 1047.85), Reliance Power (down 4.75% to Rs 184.40), PowerGrid Corporation of India (down 4.31% to Rs 83.30), Tata Power Company (down 3.92% to Rs 1225), NTPC (down 2.63% to Rs 161.30) edged lower.

Auto stocks fell. Indias largest commercial vehicles maker by sales Tata Motors declined 4.83% to Rs 513.95. Mahindra & Mahindra (down 2.95% to Rs 565), Maruti Suzuki India (down 1.72% to Rs 740), Hero Honda Motor (down 1.77% to Rs 742) edged lower.

Jaiprakash Associates (down 5.74% to Rs 189.50), Bharti Airtel (down 4.12% to Rs 769), HDFC Bank (down 4.24% to Rs 1185), BHEL (down 4.18% to Rs 1362), ONGC (down 4.3% to Rs 898.10) edged lower from the Sensex pack.

Indias second largest telecom services provider by sales Reliance Communication declined 2.8% to Rs 531.50. Reliance Communication (RCOM) and the South African telco MTN will reportedly decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.

Spice Communications rose 1.64% to Rs 52.80. Modis, who own 40.8% of Spice Communications, are reportedly learnt to have roped in Bahrain Telecommunications Co (Batelco) to buy out Telekom Malaysia's 39.2% stake in the company.

J.K. Lakshmi Cement declined 1.92% to Rs 94.40. It reportedly plans to invest Rs 100 crore to add five more ready mix concrete units by the end of this fiscal year. It currently has 10 units, the reports added.

Jet Airways declined 2.29% to Rs 548.10. Jet Airways has reportedly deferred the commencement of its Delhi-Hong Kong operations till November 2008, possibly due to delays in deliveries of some of the Boeing aircraft. Sagar Cements rose 0.23% to Rs 393.20. France's Lafarge and Vicat and Germany's HeidelbergCement are reportedly eyeing a stake in Sagar Cements.

S.Kumars Nationwide declined 2.23% to Rs 98.50. The board of S.Kumars Nationwide will meet on 14 June 2008 to consider international acquisition of a business.

Hindustan Oil Exploration Company declined 1.43% to Rs 127.25. It reported net profit of Rs 7.45 crore in Q4 March 2008 as against net loss of Rs 9.82 crore in Q4 March 2007. Sales rose 46.1% to Rs 36.21 crore in Q4 March 2008 over Q4 March 2007.

Surging global crude oil prices, a hike in domestic fuel prices and rising inflation have spooked the domestic bourses in the past few days. Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices. From a recent high of 17,434.94 on 16 May 2008, the barometer index, BSE Sensex tanked 1,862.76 points or 10.68% in a short span to 15,572.18 on 6 June 2008.

FIIs sold shares worth a net Rs 3291.20 core in the first few days of this month, till 5 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.

Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.

After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.

A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.

A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicati