Mkts end at 15-mth low; Sensex down 5%, Bankex dips 7.75%

Bears completely weighed on markets, which closed at 15-month low. All Sensex and Nifty stocks ended in red. Most beaten down sectors were banking, capital goods, metal, power, realty, pharma and oil & gas. Huge sell off has seen in global markets especially Asian and European markets, which fueled to weak sentiments further. The Sensex and Nifty both hit new 2008 lows in today's session.

Nifty crashed over 204 points to touch an intraday low as well as new 2008 low of 3835.50 and breached earlier low of 3,848.25. It closed with a loss of 178.6 points or 4.42% at 3861.10.

Sensex was down 654.32 points or 4.91% to finish at 12,676.19. It slipped 725.51 points to hit new 2008 low of 12,605 and broken earlier low of 12,810.31.

Amongst frontliners, Ranbaxy Labs fell 14%.01, HDFC Bank -11.26%, ICICI Bank -8.72%, Hindalco -8.30%, Idea Cellular -7.91%, Reliance Comm -7.22% and HDFC -6.86%. 

Main reason behind this negative sentiment across the globe was unstoppable credit crisis in US financial space despite US government's bail out package for mortgage financiers Fannie May and Freddie Mac.

Most banking stocks took huge beating worldwide on fear of more bank failures in the US. There are reports, which suggest that Japan's top 3 banks have exposure of over USD 45 billion in Freddie Mac and Fannie Mae. Reports that UK house-price has declined the most in June.

Experts believe that RBI may consider another 50 bps hike in Repo rate and CRR. They see Inflation around 15% by this quarter end and slow down in economy growth.

Sailesh K Jha, Senior Regional Economist at Barclays Capital expects 15% inflation by September, excluding another fuel price hike. He added that in case of 15-20% fuel price hike, inflation could rise to 17%. Jha sees significant slowing down of growth in H2 FY09. He expects complete collapse of portfolio flows to stock markets.

According to Jha, the Reserve Bank of India, or the RBI may hike repo rate by 200-250 bps and the CRR by 125-175 bps over a year. He expects the RBI to up repo rate by 50 bps in July meet, along with CRR.

James McCormack of Fitch Ratings has affirmed long-term local currency rating at BBB and has revised FY09 GDP growth forecast to 7.7%. He believes the worsening fiscal position is the reason for a lower ratings outlook and expects fiscal deficit to rise to 4.7% in FY09.

Reliance Industries, ONGC, Reliance Comm, ICICI Bank, DLF, HDFC Bank, HDFC, SBI and L&T were top contributors for dragging indices lower.

Top Ten contributors in today's fall

Nifty July futures discont widened to 68 points on back of huge fresh shorts. Nifty futures added 50 lakh shares in Open Interest. Financial stocks witnessed huge addition of short positions.

Banking was the worst beaten down sector in today's trade, Bankex lost 462.52 points or 7.75% to settle at 5,508. Stocks like HDFC Bank, Yes Bank, ICICI Bank, IndusInd Bank, Union Bank, SBI, Axis Bank and Kotak Mahindra fell 6-11%.

Realty Index plunged 5.44% or 259.08 points at 4,503.45 due to selling in Peninsula Land, DLF, Unitech, Omaxe, Sobha Developer, Phoenix Mills, Anant Raj Ind and Orbit Corporation, which lost 5-6.7%.

Capital Goods stocks like Alstom Projects, BHEL, Siemens, Crompton Greaves, BEML, Punj Lloyd, ABB, Bharat Bijlee, Areva T&D, Rel Ind Infra and L&T declined 4.5-7%. Index was down 564.26 points or 5.25% at 10,175.75.

Power stocks have darkened the space. This includes Reliance Infra, Suzlon Energy, Lanco Infratech, Reliance Power, Power Grid Corp, GVK Power and Neyveli Lignite, which fell 4-6%. Index closed at 2,224.37, down by 4.91% or 114.91 points.

Healthcare Index went down 170.67 points or 4.18% at 3,909.25 due to huge sell off in Ranbaxy Labs, Matrix Lab, Cadila Health, Glenmark, Divis Labs and Biocon. Ranbaxy Labs slid over 14% in today's trade after losing 11% in yesterday's session. UBS says may see up to 50% downside in stock if Daiichi-Sankyo withdraws offer.

FMCG stocks like ITC, Britannia, United Spirits, HUL and Nestle were down 3-5%. Index plunged 3.93% at 1,881.40.

Oil & Gas Index lost 307.37 points or 3.42% at 8,677.70 due to selling in RNRL, HPCL, Essar Oil, BPCL, Petronet LNG, ONGC, Reliance Ind and GAIL, which fell 3-5%. Crude went up to USD 146 per barrel on the NYMEX.

Auto stocks like Escorts, Hind Motors, M&M, Bajaj Auto, Bharat Forge, Maruti Suzuki, Exide Industries and Cummins skid 3-6%. Index was down 2.5% at 3,477.28.

IT Index ended at 3,589.57, down 2.34% as selling was seen in Financial Tech, Aptech, Wipro, HCL Tech, I-Flex Solution, Satyam, TCS, Infosys and Patni Computer.

BSE Midcap Index was down by 167.29 points or 3.14% at 5,163.51 and Small Cap Index down 209.16 points or 3.15% at 6,430.90. Amongst midcap stocks, IVRCL Infras, Chambal Fert, Sterlite Techno, India Infoline, Yes Bank, Advanta, IndusInd Bank, DCB, Prakash Ind and Plethico Pharma lost 8-12.6%.

In the small cap space, Sparsh BPO Svcs, Grabal Alok Imp, CMC, Arihant Found and Piramal Glass plunged 10-20%.

Market breadth was worsened; about 673 shares have advanced while 2251 shares declined. Nearly 223 shares remained unchanged.

All Indices

Total turnover traded by markets stood at Rs 59,029.17 crore. This includes Rs 10,611.71 crore from NSE Cash segment, Rs 44,122.92 crore from NSE F&O and the balance Rs 4,294.54 crore from BSE Cash segment.

On the global front, Asian markets witnessed huge sell off. Shanghai Composite, Hang Seng, Jakarta, Nikkei, Straits Times, Kospi and Taiwan Weighted slipped 2-4.5%. FIIs net sold worth USD 267 million (provisional) equity shares in today's trade in Taiwan market. Mitsubishi UFJ, Japan's largest bank fell 5%. Sumitomo Mitsui Financial, 2nd biggest bank in Japan fell 5.9%.

European markets were trading sharply lower at the time of writing market report. FTSE and CAC fell 1.2% each. DAX was down 1.7%.

Market Snapshot

• Markets close at 15-mth low; Fitch revises India's local currency outlook to negative
• Financial stocks slide globally on fears of more bank failiures in US
• Sensex ends down 654 pts at 12676; Nifty ends down 179 pts at 3861
• CNX Midcap Index ends down 3.6%; BSE Small-Cap Index down 3.15%
• All BSE Sectoral Indices end in the red
• Top losers: Ranbaxy down 14% after losing 11% in yesterdays trading session
• BSE Bank Index down 7.8%; HDFC Bank down 11%, ICICI Bank down 8.5%, SBI down 6%
• Midcap/Non-Index banks:  Axis Bank down 5.9%; Kotak Mah down 5.6%, Yes Bank down 9%, IndusInd bank down 8.6%
• BSE Realty Index down 5.4%;DLF down 7%;Unitech down 6.3%;Indiabulls Realty down 3.5%
• BSE Cap Goods Index down 5.3%;BHEL down 6.7%; Siemens Index 6.2%; Punj Llyod 5.9%; ABB down 5.5%; L&T down 4.5%
• BSE Metals Index down 5.2%; Hindalco down 8%; Sterlite down 6%; Tata Steel down 5.2%; Nalco down 3.6%
• Index Losers: Idea Cellular down 8%;Reliance Comm down 7.2%; HDFC down 7%; Wipro down 6.2%;Reliance Infra down 6%;HCL down 5.6%;Suzlon down 5.4%
• Other losers: Sejal Architecture down 17%; CMC down 13%, IVRCL Infra down 10.3%; Tata Chem down 10%;Chambal Fert down 9.9%; IDFC down 9.6%
• Stocks locked on lower circuit: Adani Enterprises, Godrej industries, GMDC, REI Agro, Tanla Solutions 
• NSE Advance Decline at 1 : 7 
• Total F&O turnover at Rs 44,123 cr Vs Rs 40,096 cr
• Total Market Turnover at Rs 59,029 cr Vs Rs 54,916 cr on Monday

F&O Snapshot

• Nifty futures discont widens to 68 pts on back of hige fresh shorts
• Nifty futures add 50 lakh shares in OI
• Financial stocks witness huge addition of short positions
• Unwinding of long positions seen in SAIl, Ispat, GMR Infra, Nag Fert, Unitech
• Options Activity
  Put writers unwind their positions in order to reduce loss
  4000 Put shed 13 lakh shares in OI
  3900 Put shed 5.2 lakh shares in OI
  3800 Put shed 5 lakh shares in OI
  4100 Put shed 2.2 lakh shares in OI
• Big Losers
  Ranbaxy down 14.5%; add 26 lakh shares in OI
  Chambal fert down 11%; add 14 kh shares in OI
  ICICI Bank down 9%; add 9.2 lakh shares in OI
  IDFC down 10%; add 6 lakh shares in OI
  Idea down 9%; add 14.5 alkh shares in OI
  DLF down 6.8%; add 6 lakh shares in OI
  ONGC down 5%; add 5 lakh shares in OI

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