The market posted losses for the fourth straight day, on sustained selling pressure triggered by worries that official attempts to moderate FII inflows would see foreigners pull out funds. The market declined sharply in first half of the trading session, but recovered some ground on value buying coupled with short covering at lower levels later. Intense volatility was the hallmark of the days session, with the market swinging sharply. Total cash market turnover on BSE crossed Rs 9,500 crore mark. European markets and Asian markets were trading lower today, 19 October 2007.

India's wholesale price index rose 3.07% in the 12 months to 6 October 2007, lower than the previous week's 3.26% rise, government data released today afternoon showed. It was the lowest annual rise in 5 years.

The BSE 30-share Sensex settled 391.71 points, or 2.18%, to 17,606.68 points, as per provisional closing. It opened slightly higher at 18,031.77. It immediately stated declining sharply. Sensex hit a low of 17,226.18, on intense selling pressure. At the days low of 17,226.18, the Sensex had lost 772.21 points for the day.

The broader based S&P; CNX Nifty declined 130 points, or 2.42% to 5,221.50, as per provisional closing

The market breadth was quiet weak on BSE: 2,160 scrips declined as compared to 544 that advanced, while 35 remained unchanged. 21 of the 30 member Sensex pack declined.

The total turnover on BSE amounted to Rs 9611 crore as compared to Rs 8611 crore by 14:30 IST.

FII selling hit the bourses for the third day in a row today following market regulator Securities & Exchange Board of India's proposals to clamp down FII inflow through the participatory notes (PN) route.

After trading hours on Tuesday, 16 October 2007, Securities & Exchange Board of India issued draft proposals wherein the market regulator proposed restriction on use of the popular participatory notes (PNs) route of FII inflow and it also recommended unwinding of some PNs within 18 months. PNs are financial instruments used by foreign investors that are not registered with Sebi, to invest in Indian shares. FIIs and their sub-accounts buy Indian securities and then issue PNs to foreign investors with these securities as the underlying.

Given the large scale of the aggregate PN holding relative to new flows, even a partial unwinding of positions can put considerable pressure on stocks such as Reliance Energy, Reliance Petroleum, ONGC, IndiaBulls Financials, IndiaBulls Real Estate and Axis Bank which have had a significant run-up in the past few weeks or have high share of PN in their foreign holding, brokerage CLSA said in a recent note.

Further, analysts reckon that with restriction on participatory notes, the near term FII inflow may be affected given that the participatory notes contributed substantially to FII inflows on the bourses over the past few months and it will take some time for the FIIs currently using the PN route to get registered with the market regulator.

Franklin Templeton Investment (FTI), which has one of the leading mutual funds in India, however, feels that inflow to India from long-term global investors will not be impacted due to these measures given that Indias economic and corporate fundamentals remain robust.

Indias second largest power utility by net sales Reliance Energy was the top loser from the Sensex pack. It plunged 16.30% to Rs 1332 on 42.74 lakh shares. Yet, the stock recovered sharply from its days low of Rs 1272.

Hindalco Industries (down 6.39% to Rs 175), Maruti Suzuki India (down 6.77% to Rs 1071), and Bharat Heavy Electricals (down 5.65% to Rs 2059), were the other losers from Sensex pack.

Indias largest private company in terms of market capitalization and oil refiner Reliance Industries (RIL) was down 3.72% to Rs 2480, off sharply from its days low of Rs 2413.05. The stock clocked volumes of 23.35 lakh shares. It reported 27.9% growth in net profit to Rs 3837 crore on 6.6% growth in net sales to Rs 32,043 crore in Q2 September 2007 over Q2 September 2006. The results are after taking effect merger of IPCL in the company. RILs gross refining margin was a robust $13.6 a barrel in Q2 September 2007 compared to $9.1 in Q2 September 2006.

Though the results were strong, there was no announcement of stock split/bonus which weighed on the stock today. The market was agog with speculation that RIL could announce a bonus issue or stock split at the time of announcing the Q2 results. The results hit the market after trading hours on Thursday, 18 October 2007.

Reliance Communications, the countrys second largest listed telecom services provider in terms of market capitalisation was the top gainer from the Sensex pack. It surged 2.50% to Rs 729.50 on 71.86 lakh shares. The company said before market hours today, 19 October 2007, that it has obtained government approval to launch GSM services on a nation wide basis under its existing Unified Access Service Licenses.

Bajaj Auto, Indias second largest bike market by sales, rose 2.41% to Rs 2519.95. The stock came off day's low of Rs 2400. Bajaj Auto's net profit rose 6% to Rs 336 crore in Q2 September 2007 over Q2 September 2006. The results hit the market during trading hours today, 19 October 2007

Tata Steel (up 1.67% to Rs 850.10), Infosys Technologies (up 0.88% to Rs 1905) and ONGC (up % to Rs 1118) were the other gainers from Sensex pack.

United Spirits was the top traded counter on BSE with total turnover of Rs 782.30 crore after 44.71 lakh shares change hands on the counter in a block deal on BSE at Rs 1652 per share by 12:12 IST.

Volatility is expected to remain high for in coming few days ahead of expiry of October 2007 derivatives contracts on Thursday, 25 October 2007.

Meanwhile, the finance minister P Chidambaram said after market hours yesterday, 18 October 2007 that Securities and Exchange Board of India (Sebi) can extend the 18-month window allowed for winding down of participatory notes already issued with derivatives as the underlying. Sebi will decide on 25 October 2007 on new rules to limit the use of offshore derivatives to invest in Indian stocks. He added that motivated rumours by Mumbai broker circles had brought down the stock market yesterday.

European markets opened lower today, 19 October 2007. Key benchmark indices in France (down 0.04% to 5,765.13), Germany (down 0.25 % to 7,901.39), and United Kingdom (down 0.12% to 6,601.13), slipped

Asian markets were trading lower today, 19 October 2007. Japan's Nikkei (down 1.71% at 16,814.37), Singapore's Straits Times (down 1.77% at 3,742.23), South Korea's Seoul Composite (down 1.75% at 1,970.10) and Taiwan's Taiwan Weighted (down 0.26% or 9,611.72) edged lower.

US markets ended mixed yesterday, 18 October 2007, after disappointing results from Bank of America Corp. provided further evidence that the credit crisis is hurting the economy. The Dow Jones Industrial Average slipped 3.58 points, or 0.03%, to 13,888.96. The Standard & Poor's index fell 1.16 points, or 0.08%, to 1,540.08. The technology-heavy Nasdaq Composite Index rose 6.64 points, or 0.24%, to 2,799.31.

Crude oil held firm within sight of its new $90 high on Friday, 19 October 2007, on rising fears over pre-winter fuel stocks lent support to an over 13% surge in under two weeks. US light crude for the soon-to-expire November contract rose 5 cents to $89.52 a barrel. The contract touched a record high of $90.02 in after-hours trade.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 1130.59 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 96.02 crore on Thursday, 18 October 2007.

The market declined sharply yesterday, 18 October 2007, in volatile trade. BSE Sensex retraced sharply after striking all-time high of 19,198.66. It settled 717.43 points or 3.83% lower at 17,998.39. The broader based S&P; CNX Nifty lost 208.3 points, or 3