Mar 22, 2008

Market Review 17th March 2008 - Market declined drastically

Markets on 17th

Market declined drastically

The Indian market after facing the bloodbath closed with heavy losses during the trading session. The market declined as the US Federal Reserve emergency step to cut in its discount rate by 25 basis point ignited the concerns of more global credit crisis that led to the negative sentiments to rule in all major markets all over the world. The dollar fell to as low as 95.76 yen, which is the weakest since Aug. 15, 1995 as growing concern about widening credit- market losses. From the sectoral point, heavy selling was witnessed from the metal, capital goods, bankex and realty baskets. The BSE Sensex declined by 951.03 points to close at 14,809.49 and NSE Nifty fell by 242.7 points to close at 4,503.10. The Sensex has touched an intraday low of 14,738.27. The BSE Mid Cap and Small Cap also followed the benchmark indices to close lower by 459.10 points and 557.27 points at 6,124.35 and 7,522.23 respectively. The market breadth was also weak as 2,404 stocks closed in red while 282 stocks closed in green.

The markets opened markedly below the dotted line and never looked like going anywhere but lower throughout the day. The pessimism among market participants showed no signs of letting down with indiscretions of global financial powerhouses continuing to hit the headlines. In fact, the day's low on the BSE Sensex came right towards the end, an indication of the how losses continued to mount with each passing hour. Both the BSE midcap, as well as the BSE smallcap index closed lower by as much as 7%. The overall market breadth was negative with no gainers on the broader BSE. ICICI Bank (down 13%) and Jaiprakash Associates (down 12%) led the pack of losers.

BHEL has secured a Rs 20 bn contract from Bhartiya Rail Bijlee Company (BRBCL, a joint venture between NTPC and Indian Railways) for the supply and installation of the main plant package for the upcoming 1,000 MW Nabinagar thermal power project in Bihar. BHEL's scope of work includes design, engineering, manufacture, supply, erection and commissioning of steam generators with electrostatic precipitators and associated auxiliaries, turbine generators and associated auxiliaries and controls & instrumentation system. It must be noted that at the end of December 2007, BHEL's order backlog stood at Rs 780 bn (4.5 times FY07 sales), which indicates strong visibility into the future. BHEL closed lower by 4%, while L&T ended lower by 6%.

Godrej Industries has received shareholders approval for further investing up to Rs 3.6 bn in Godrej Consumer. The shareholders of the former company have given a go ahead to investments through securities, debentures or guarantees for availing loans. It may be noted that Godrej Industries had earlier said it would invest up to Rs 1 bn in Godrej Consumer. Interestingly, the latter is also raising Rs 4 bn from a rights issue that would be utilised for funding capital expenditure, payment of certain debts, investing in its Dutch subsidiary and its joint venture Godrej SCA Hygiene. Godrej Industries ended lower by 8%, while Godrej Consumer closed marginally higher. 

Source - Religare