Indian market plunges ahead of release of key economic data

Thursday, the Indian market plunged following intense selling in bank stocks and Reliance Industries in late trading. After opening flat, the market drifted down into negative territory within a few minutes.

Trading remained choppy for the next few hours in the early session. Subdued opening of the European markets and intense selling in select index heavyweights dragged the indexes sharply down in the afternoon. The rebound in the price of crude oil to above $119 a barrel in Asian trading affected investor sentiment. The price of oil rose led by reports that the Tropical Storm Gustav could head towards the Gulf of Mexico region, which if it does, will affect about 85% of the US offshore oil and gas production installations. Traders remained cautious ahead of the release of wholesale inflation data and the GDP report for the 1st quarter. Analysts' reports that predicted a decline in the first quarter GDP growth rate weighed on market movement. Investors were hesitant to make purchases ahead of the release of the GDP report on Friday. Meanwhile, traders were also cautious ahead of the release of wholesale inflation data in the evening. The wholesale price index is forecast to have risen to a fresh 16-year high for the week ended August 16th. On the BSE, stocks across sectors ended in the red. Oil/gas, capital goods, public sector and metal companies were among the major losers. The market breadth was extremely negative, with only 898 stocks gaining compared to 1721 stocks that declined. After opening at 14,290, the BSE Sensex rose to an intra-day high of 14,347 in the early session. Towards closing of the day, the benchmark drifted to an intra-day low of 14,002, before finishing slightly better at 14,048, down 248 points or 1.74% over Wednesday's close. The small-cap index ended down 1.13%, the mid-cap index declined 1.36% and the broad-based BSE 500 index plummeted 1.51%. Meanwhile, the S&P CNX Nifty settled at 4,214, down 78 points or 1.82%. Reliance (down 3.45%), Reliance Infrastructure (down 3.15%), BHEL (down 3.12%), TCS (down 3.05%), Reliance Communication (down 2.98%), Larsen & Toubro (down 2.98%), Larsen & Toubro (down 2.91%), Wipro (down 2.67%), ICICI Bank (down 2.30%), Hindustan Unilever (down 2.17%), DLF India (down 2.08%), HDFC (down 1.97%), Tata Steel (down 1.65%), State Bank of India (down 1.61%), Mahindra & Mahindra (down 1.53%), HDFC Bank (down 1.46%), Tata Motors9down 1.22%) and ACC (down 1.12%) were among the major decliners. Only 6 out of 30 Sensex stocks, namely Maruti Suzuki, Satyam Computers, Ranbaxy Laboratories, Tata Power and ITC finished in positive territory. The Apollo Hospitals rose 1.66% after the company reportedly said it is in talks to acquire a 30 percent stake in a hospital in Nigeria for about Rs.52 crore. Tata Motors declined 1.22% following reports that work at its plant in Singur came to a halt as workers couldn't turn up for duty following threatening by the activists from the Trinamool Congress party. Sterlite Technologies declined 0.82% even as the company bagged four new orders worth Rs. 278 crore for supply of power conductors. Asian Tea & Exports gained 4.99% after the company's board recommended a stock split in the ratio of 10-for-1 for its shareholders. Apollo Sindhoori Capital surged up 9.55% after the board of directors of Aditya Birla Nuvo approved the acquisition of a 56% stake in the company. Reliance Industries lost 2.88% after the company confirmed media reports that it is planning to transfer 80% of its participatory interest (PI) in the D6 block in the Krishna Godavari (KG) basin to four unlisted subsidiaries. Mahindra & Mahindra fell 2.76% following reports that the company is in talks with Italian motorcycle and scooter maker Malaguti Moto for a possible takeover. Pyramid Saimira Theatre added 2.61% on reports the company is close to acquiring UK's oldest theatre chain Reel Cinemas, earlier Associated British Cinemas or ABC, for around Rs.200 crore. Oriental Bank Of Commerce declined 1.42% following an upward revision of 25 basis points in its prime-lending rate. Ram Kaashyap Investment shed 4.98% following the company's proposal to enhance its authorized capital to Rs.50 crore from the current Rs.25 crore. The company proposed to re-classify it existing capital by converting 4,00,000 (a part of) un-issued preference shares of Rs.100 each to 40,00,000 equity shares of Rs.10 each. Markets across the Asia-Pacific region finished mixed. Hong Kong's Hang Seng index plunged 2.29% and South Korea's KOSPI Composite index declined 1.32%, while Japan's Nikkei 225 index added 0.12% and China's Shanghai Composite index rose 0.34%. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved