The market settled lower on sustained FII selling, margin selling and weak global markets, continued to haunt the markets for the seventh straight day. However things did not look that weak as it were in the morning trade when trading was halted due to triggering of 10% market-wide circuit limit. Shares of heavyweights including ICICI Bank, Reliance Industries, Infosys Technologies and Bharti Airtel along with probable short covering propelled markets from lower levels.

The market came off lower level in mid-afternoon trade as European markets recovered with UKs FTSE 100 index moving into positive zone. Stocks tumbled across Asia today as panic gripped markets that a US recession could derail global economic growth, sending investors fleeing to safe-haven government bonds.

The BSE Sensex lost 801.52 points or 4.55% to 16,803.83, as per provisional closing. Sensex hit a low of 15,332.42 in mid-morning trade. At the day's low, Sensex lost 2273.93 points. from here it staged a sharp recovery to hit a high of 17,068.57

The broader CNX S&P; Nifty was down 290.05 points or 5.57% to 4,918.75, as per provisional closing. At the days low of 4,448.50, the Nifty lost 760.30 points for the day

The BSE Mid-Cap index lost 8.09% to 7,244.66 and the BSE Small-Cap index slipped 7.41% to 10,103.64, as per provisional closing. Both these indices underperformed the Sensex

Earlier today, market wide circuit filters were applied after an intra-day 10% fall occurred in key benchmark indices in minutes of commencement of trade. Trading on the bourses was halted for one hour as the 10% market wide circuit filters were applied after the sharp fall. Trading resumed at 10:55 IST.

Finance Minister P Chidambaram today said the fundamentals of the economy are strong and liquidity will not be a problem. Chidambaram said there was no reason at all to allow the worries of the Western world to overwhelm us. Our economy is very different from some developed economies which are facing some stress, he said.

The finance minister further stated that Reserve Bank of India as well as banks will provide enough liquidity to brokers and other market players, adding that liquidity will not be an issue.

The total turnover on BSE was quite low today probably as many brokers were unable to trade in the morning as their terminals were shut due to non-payment of margins to the exchange. It amounted to Rs 6846 crore as compared to Rs 9336 crore yesterday, 21 January 2008.

The market breadth was extremely weak on BSE. On BSE, 2264 declined as compared to just 2+3 that rose. A total of 26 shares remained unchanged.

Among the 30-member Sensex pack, 26 declined while the rest gained. Ina opening trade all the 30-members of Sensex pack were in red.

Indias largest oil exploration company in terms of market capitalisation Oil & Natural Gas Corporation plunged 12.48% to Rs 975 on 7.48 lakh shares. It was the top loser from Sensex pack. The stock though recovered sharply from days low of Rs 850.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries was down 7.62% to Rs 2350.35, off sharply from days low of Rs 2120. 18.89 lakh shares were traded on the counter

ICICI Bank, the countrys largest private sector bank in terms of net profit, was down 3.68% to Rs 1130, off session's low of Rs 1005.55.

HDFC Bank slumped 3.13% to Rs 1470. It registered 45.2% rise in net profit to Rs 429.36 on on 59.70% rise in total income to Rs 3405.79 crore in Q3 December 2007 over Q3 December 2006. The results were announced after trading hours on Monday, 21 January 2008.

ITC (down 10.50% to Rs 182), Ambuja Cements (down 10.22% to Rs 114.15), and Hindalco Industries (down 11.42% to Rs 147), were the other losers from Sensex pack

Bharti Airtel surged 3.24% to Rs 855.10 and was the top gainer from Sensex pack. The stock recovered sharply from days low of Rs 700.

Infosys Technologies (up 2.14% to Rs 1420), Reliance Energy (up 1.35% to Rs 1800), and Bajaj Auto (up 0.75% to Rs 2080), were the other gainers from Sensex pack.

European markets staged a solid intra-day recovery on rumors that US Federal Reserve, the European Central Bank, the Bank of England are resorting to rate cut. The FTSE 100 index of United Kingdom was up 0.15% to 5,586.80 after a sharp early fall. However Frances CAC 40 index was still down 0.54% to 4,718.99.

Hong Kong's Hang Seng (down 8.65% at 21,757.73), Japan's Nikkei (down 5.65% at 12,573.07), Taiwan's Taiwan Weighted (down 6.51% at 7,581.95), China's Shanghai Composite (down 7.22% to 4,559.71) and South Korea's Seoul Composite (down 4.43% at 1,609.02), declined.

Margin calls, both by brokers to investors and by exchanges to brokers, added to the selling pressure. Brokers would not let clients make new purchases until margins were topped up on existing trades, and the exchanges also called margins due from brokers.

Margin trading is where investors trade shares without paying the full cost of the share. Instead a margin or percentage is paid as collateral, and when the market moves against the investor, the margin needs to be topped up. If the investor does not make payment, the shares can be sold by the broker. A margin call is also triggered when shares that an investor had bought with borrowed money decrease in value. If the investor is not able to put up additional margin, the broker/financer will resort to sale of shares.

US stock markets were closed on Monday, 21 January 2008 in observance of Martin Luther King Day.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 3296.73 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 3399.20 crore on Monday, 21 January 2008.

FIIs were net buyers to the tune of Rs 1,104.41 crore in the futures & options segment on Monday, 21 January 2008. They were net sellers of index futures to the tune of Rs 1,461.31 crore and bought index options worth Rs 374.46 crore. They were net buyers of stock futures to the tune of Rs 2,195.21 crore and sold stock options worth Rs 3.95 crore.

The US economy has been hit hard by rising defaults in the sub-prime mortgage sector in which Americans with bad credit records are struggling to pay back housing loans given to them during the housing boom.

US president George Bush on Friday, 18 January 2008, called for a package of tax cuts and other measures totaling around 1% of US gross domestic product, or up to $150 billion, after weak recent reports on employment, retail sales, factory activity, and housing construction this month suggested the United States -- the world's largest economy --may be heading into recession. Under consideration in the package announced by Bush are ideas like tax rebates, incentives for businesses, and extensions of unemployment insurance.

Crude oil prices fell on Tuesday, 22 January 2008 on mounting concerns that the U.S. economy may be heading into a recession that would likely dampen crude demand. Light, sweet crude for February delivery fell $2.22 to $88.35 a barrel in electronic trading on the New York Mercantile Exchange in Singapore. In London, Brent crude futures for March delivery fell 16 cents to $87.35 a barrel

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