Weak industrial production for May 2008 dragged the market lower in the early afternoon trade. IT stocks slipped after IT bellwether Infosys said at the time of announcing Q1 June 2008 results today that the business environment was tough. Stocks of state-run firms soared on divestment hopes.

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.

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 0.39% to 2.39%. China's Shanghai Composite index was down 1.14%.

At 12:20 IST, the 30-share BSE Sensex was down 190.76 points or 1.37% at 13,735.48. It shed 226.13 points at the days low of 13,700.11 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 45.75 points or 1.10% at 4116.45.

The BSE Mid-Cap index was down 0.01% at 5,474.70, while the BSE Small-Cap index was up 0.44% at 6,839.28.

The market breadth was positive on BSE, with 1246 gainers outpacing 1062 losers. 75 stocks remained unchanged.

Indias top cellular service provider by sales Bharti Airtel rose 3.40% at Rs 767. As per reports, the company added 2.56 million users in June 2008, taking its total user base to 69.4 million.

Cement stocks held firm. Grasim Industries (up 2.49% at Rs 1783), Ambuja Cements (up 2.15% at Rs 80.70) and ACC (up 1.76% at Rs 562.25), rose.

The top Sensex gainers were, Hindalco Industries (up 3.68% at Rs 159.30), Bharti Airtel (up 3.55% at Rs 768.05), Tata Motors (up 1.35% at Rs 404.10), and HDFC Bank (up 1.17% at Rs 1067), and State Bank of India (up 0.32% at Rs 1238.20).

Prominent Sensex losers were, Housing Development Finance Corporation (down 3.28% at Rs 2046), Jaiprakash Associates (down 2.49% at Rs 166), Larsen & Toubro (down 2.24% at Rs 2475), and Hindustan Unilever (down 2.32% at Rs 212.70).

IT stocks languished in negative territory. TCS (down 4.26% at Rs 832), Satyam Computer (down 3.92% at Rs 460.30), and Wipro (down 3.10% at Rs 417.65), slipped.

India's second largest software exporter by sales Infosys Technologies slipped 3.89% at Rs 1736. 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.

Shares of public sector units witnessed buying interest on hopes the government may kickstart divestment of state-run units following Left's withdrawal of support to the government. MMTC (up 7.59% at Rs 24,401), State Trading Corporation of India (up 4.01% at Rs 267), National Aluminium Company (up 3.26% at Rs 372), Mangalore Refinery & Petrochemicals (up 2.91% at Rs 53) and Rashtriya Chemicals & Fertilisers (up 2.44% at Rs 54.50), gained.

Over the last four years, Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank. Left parties on Tuesday said they are withdrawing support to the Congress-led United Progressive Alliance government to protest Indo-US nuclear deal.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries declined 0.30% at Rs 2038.

Indias largest private sector bank by market capitalization ICICI Bank declined 2.76% at Rs 599.70.

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.

Powered byCapital Market - Live News