The market extended losses in early afternoon trade hit by the latest data which showed a further rise in inflation. Bharat Heavy Electricals (Bhel) and Mahindra & Mahindra were major losers whereas Tata Steel and Ranbaxy Laboratories were major gainers from the Sensex pack. Banking stocks fell after concenrs of possible Reserve Bank of India intervention to rein in inflation. IT, capital goods and auto stocks declined. The market breadth turned weak.

At 12:21 IST, the 30-share BSE Sensex was down 343.78 points or 2.17% at 15,488.19. At the days low of 15,445.39 Sensex lost 387.16 points in early afternoon trade. At the days high of 15,896.09, the Sensex rose 63.54 points in early trade.

The broader based S&P; CNX Nifty was down 92.85 points or 1.95% at 4,678.75.

India's wholesale price index (WPI) rose 7% in the 12 months to 22 March 2008, accelerating from the previous week's rise of 6.68%. The rate is the highest since 4 December 2004.

The market breadth turned weak: on BSE 812 shares advanced as compared to 1561 that declined. 56 shares remained unchanged.

The BSE Mid-Cap index down 1.31% to Rs 6,303.34 and BSE Small-Cap index down 0.98% to 7,763.30.

Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries was down 1.41% to Rs 2,358.55.

Banking stocks plunged after inflation data. HDFC Bank (down 2.22% to Rs 1,297.05), ICICI Bank (down 2.14% to Rs 770.50) and State Bank of India (down 2.02% to Rs 1,603.20) edged lower.

IT stocks declined after yesterdays surge. Infosys (down 2.68% to Rs 1,480.10), Satyam Computer Services (down 2.93% to Rs 415.80), Wipro (down 3.29% to Rs 420.50) and Tata Consultancy Services (down 2.48% to Rs 864) edged lower.

Capital goods stocks extended losses. Bharat Heavy Electricals (down 4.73% to Rs 1,672) and Larsen & Toubro (down 3.55% to Rs 2,745) edged lower. Suzlon Energy rose 1.08% to Rs 275.

Auto stocks declined. Maruti Suzuki India (down 3.03% to Rs 764.45), Mahindra & Mahindra (down 4% to Rs 618), Tata Motors (down 3.48% to Rs 606.85) edged lower.

HDFC (down 4.53% to Rs 2,332.25), ONGC (down 2.8% to Rs 992), ITC (down 3.58% to Rs 200.55) and Reliance Energy (down 3% to Rs 1153.80) edged lower from Sensex pack.

Ranbaxy Laboratories (up 2.61% to Rs 458.50) and Tata Steel (up 0.67% to Rs 664) edged higher from Sensex pack.

ACC shed 0.65% to Rs 828.50 even as the company said its cement shipments rose 4.9% to 1.92 million tonnes in March 2008 over March 2007.

As per provisional data, foreign funds sold shares worth a net Rs 393.41 crore on Thursday, 3 April 2008. Domestic funds bought shares worth a net Rs 265.39 crore.

Foreign institutional investors (FIIs) were net buyers of Rs 132.39 crore in the futures & options segment on Thursday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 248.96 crore. They sold index options worth Rs 86.22 crore. They were net sellers of stock futures to the tune of Rs 28.70 crore and sold stock options worth Rs 1.66 crore.

Japans Nikkei edged 0.72% lower in cautious trade today, 4 April 2008, ahead of US jobs data later in the session that will provide fresh clues on the world's largest economy. Stock markets in China, Taiwan and Hong Kong were closed today for the Tomb Sweeping Day holiday.

US stocks edged up on Thursday, after a report that Merrill Lynch & Co does not need to raise more capital eased fears of a deeper credit crisis and offset concern that monthly jobs data would point to a recession. The Dow Jones Industrial Average gained 20.20 points or 0.16% at 12,626.03. The tech-laden Nasdaq Composite index rose 1.90 points or 0.08% to 2,363.30.

Meanwhile, the Bombay Stock Exchange (BSE) today launches the trading of Sensex-based futures on the US Futures Exchange (USFE) in Chicago. The contract will have a notional value of $40,000 and a tick value of $10. The clearing and settlement will take place through The Clearing Corporation, Chicago.

Stock-specific activity may rule the roost on the bourses depending on the guidance given by company managements for FY 2009 at the time of announcing Q4 March 2008 results. IT bellwether Infosys Technologies kickstarts the earnings reporting season on 15 April 2008.

Prospects of further monetary tightening by the Reserve Bank of India (RBI) following a surge in inflation is a cause for concern at a time when the already high rates are pinching the domestic industry. The surge in inflation to a 14-month high in mid-March 2008 has triggered fears that RBI my raise cash reserve ratio (CRR). An increase in CRR would suck out liquidity immediately pushing up the cost of funds and thereby curbing demand. The government will today release inflation data for the year through 22 March 2008.

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