The key benchmark indices made a sharp rebound in mid-afternoon trade as European markets came off lows and US index futures that indicated a higher opening on Wall Street at the opening bell. Sensex recovered close to 700 points from the day's low. It was now down 96.99 points or 0.9%.
Index stocks, Sterlite Industries, Reliance communications, HDFC, Bharti Airtel, and Tata Steel recovered sharply from their lows. Banking stocks bounced back on softening inflation. European markets were down between 3.14% to 3.91%, after having fallen as much as 5.6% earlier on global recession worries. Trading in US index futures suggested the Dow would rise 85 points at the opening bell.
At 14:22 IST, the BSE 30-share Sensex was down 96.99 points or 0.9% to 10,712.13. The index declined 791.32 points at the day's low of 10,017.80 hit in early afternoon trade, its lowest level since 24 July 2006. The Sensex fell 63.15 points at day's high of 11,745.97 sensex during mid-afternoon trade.
The S&P; CNX Nifty was down 58.20 points or 1.74% to 3,280.20. It hit a low of 3,099.90, its lowest level since 26 July 2006.
The BSE Mid-Cap index was down 2.51% at 3,627.10 and The BSE Small-Cap index was down 3.34% at 4,246.73. Both the indices underperformed the Sensex.
The market breadth was very weak. On BSE, 565 shares advanced as compared to 1,924 that declined. 47 shares remained unchanged.
India's largest private sector company by market capitalization and oil refiner Reliance Industries fell 6.86% to Rs 1,416. The stock came off from a 52-week low of Rs 1,327. The stock declined for the second day in a row today on fears the company may report fall in its gross refining margins in Q2 September 2008 over Q2 September 2007 largely due to sluggish demand for petroleum products in key Western markets. The stock had slumped 6.2% yesterday, 15 October 2008.
Metal stocks recovered from lower level Sterlite Industries rose 7.99% to Rs 315.50, off the day's low of Rs 316.65. India's largest steel maker by sales Tata Steel rose 2.69% to Rs 281.10 off day's low of Rs 281.20.
Telecom stocks bounced back. India's largest telecom services provider by market share Bharti Airtel rose 2.91% to Rs 739.75 off day's low of Rs 655. India's second largest telecom services provider by sales Reliance Communications jumped 6.96% to Rs 252.20, off the day's low of Rs 214.20.
Among the major losers from the Sensex pack were Hindalco Industries (down 9.82% to Rs 71.60), Grasim Indstries (down 7.5% to Rs 1,380), Larsen & Toubro (down 6.2% to Rs 837.80).
Auto stocks were mixed. Mahindra & Mahindra, Tata Motors fell between 5.79% to 11.36% while, Maruti Suzuki India and Hero Honda Motor rose between 0.01% to 0.16%.
FMCG majors rose on defensive buying in falling market. Hindustan Unilever and ITC were up between 1.61% to 1.68%. During market turmoil, investors prefer sectors such as FMCG which remain relatively unscathed in an economic downturn
Softening of inflation triggered recovery in bank stocks from an initial slump. India's largest private sector bank by net profit ICICI Bank rose 1.45% to Rs 420.20 off the session's low of Rs 376.25. ICICI Bank ADR slumped 14.19% in US on 15 October 2008.
India's largest private sector bank by net profit HDFC Bank dipped 2.42% to Rs 1,106, off the day's low of Rs 1,041. HDFC Bank ADR fell 13.21% in US on 15 October 2008. The bank will announce Q2 September 2008 result today, 16 October 2008. State Bank of India, India's biggest commercial bank, was up 2.87% to Rs 1,540 off day's low of Rs 1,420.55.
India's largest home loan lender by sales HDFC rose 5.98% to Rs 1,815.35, off the day's low of Rs 1,600.
Lower inflation may trigger cut in interest rate by the Reserve Bank of India (RBI) which may spur lending. Inflation based on the whole price index rose 11.44% in year through 4 October 2008, lower than previous week's 11.8% rise, data released by the government today, 16 October 2008, showed.
Oil exploration firm Cairn India slumped 10.12% as fall in crude oil price to a 14-month low today, 16 October 2008, will reduce realisations.
Refex Refrigerants was locked at 5% lower limit at Rs 76.10 as net profit fell 23.3% to Rs 2.76 crore in Q2 September 2008 over Q2 September 2007.
The market regulator Securities & Exchange Board of India (Sebi) has tightened margins in the derivatives segment to ward defaults and curb volatility. The exposure margin for gross open positions in single stock futures and gross open positions in stock options will now be higher of 10% or 1.5 times the standard deviation in the notional value of the positions.
Reserve Bank of India (RBI) on Wednesday, 15 October 2008, cut the cash reserve ratio (CRR) by a 100 basis points to 6.5% The CRR cut would release Rs 40000 crore into the banking system. The CRR cut takes effect from the current two-weekly reporting period for banks, which began on 11 October 2008.
With a view to ease the liquidity in the banking system, the central bank has also allowed banks to borrow an additional 0.5% of their net demand and time liabilities using their SLR (statutory liquidity ratio) holdings as collateral under the LAF (liquidity adjustment facility) to meet liquidity requirements of mutual funds. SLR is the amount of deposits banks have to invest in government debt. The RBI will also release the first installment of Rs 25,000 crore under the agricultural debt waiver and debt relief scheme to banks immediately, at the government's behest.
A warning of tough times ahead by Federal Reserve Chairman Ben Bernanke sent Asian markets sharply lower, as investors brace for looming recession. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 3.25% to 11.41%.
Shrugging off recent optimism about massive government efforts to prop up the global financial system Wall Street , yesterday, 15 October 2008, suffered its worst one-day percentage decline since the stock market crash of 1987.
Crude oil for November delivery fell as much as $1.58, or 2.1%, to $72.96 a barrel on the New York Mercantile Exchange on 15 October 2008, the lowest since 30 August, 2007.
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