It was a sharp cut in Indian equities along with global markets through the day as endless credit crisis in the US financial space worries markets globally. Rate sensitives, infrastructure, oil and technology stocks witnessed huge selling pressure followed by midcap and small cap stocks. Benchmark indices crashed severely on huge volumes. But some recovery was seen in last one hour of trade led by auto and banking stocks.

Bears have been playing their role for fifth consecutive day and kept bulls under control. Financial woes are still active in the US financial space. The news of Lehman Brothers filed Chapter 11 bankruptcy has played a big role in today's session, which is one of the most reputed financial firm in the US. This news has walloped Asian and European markets as well. US markets are likely to open lower, say experts.

Lehman Brothers says no broker-dealer subsidiaries to be included in bankruptcy filing and the company is exploring sale of its broker-dealer operations. Bank of America and Barclays had showed an interest in the Lehman Brothers but backed out.

Ramesh Damani feels that global markets will go through painful adjustment period.

Kirby Daley of New Edge Group sees outflows from emerging markets, including India. He expects a lot of action from the Fed and the US government to keep the situation under control and expects global retrenchments.

Indian benchmark indices were slaughtered severely after this news; the Sensex lost 850 points and the Nifty fell 273 points to hit an intraday low of 13,150.81 and 3955.40, respectively. The Sensex closed with a loss of 469.54 or 3.35% at 13,531.27 and the Nifty fell 155.55 points or 3.68%, to settle at 4072.90.

Some buying in auto and banking stocks has helped markets a bit in last one hour of trade. Both indices recovered nearly 380 points and 117.5 points, respectively. This recovery might be because of Crude, which touched USD 96 to a barrel and China has cut its lending rates by 27 basis Points from September 16, which also cuts its reserve requirements for small banks by 1%.

Top Losers on the Sensex

BSE Midcap index crashed by 248.55 points or 4.49% to 5,288.59 and Small Cap Index fell 331.07 points or 4.93%, to settle at 6,380.47. Among midcap stocks, Indiabulls Securities, Anant Raj Ind, Mercator Lines, Ansal Properties, Orbit Corporation, MIC Electronics, Dish TV India and IFCI lost 11-13%.

In the small cap space, Prithvi Information, Subhash Project, Take Solutions, Aptech and Everonn Systems fell 13-17%.

BSE Realty Index underperformed other indices, plunged 359.20 points or 7.65% to 4,334.52. Anant Raj Ind, Ansal Properties, HDIL, Peninsula Land, Akruti City, Sobha Developer, DLF and Unitech slipped 7.5-13%.

IT Index fell 209.91 points or 5.51% to 3,596.83. Satyam, Patni Computer, HCL Tech, TCS, Tech Mahindra, Infosys and Wipro went down by 4-9.5%.

Sectoral Indices

Power stocks like Reliance Infra, Torrent Power, GVK Power, CESC, Reliance Power and Power Grid Corp lost 6-10%. Index fell 111.46 points or 4.38% to 2,435.07.

Capital Goods stocks remained under huge selling pressure. Index slipped 469.66 points or 3.97%, to settle at 11,366.92. Praj Industries, Siemens, Elecon Engg, BEML, Alstom Projects and Areva T&D slipped 5-9%. BHEL was down 4.04% and L&T lost 3.65%.

Bankex fell 237.20 points or 3.37%, to close at 6,792.02. IDBI Bank, Union Bank, Karnataka Bank, IndusInd Bank and Axis Bank lost 5-7.5%. ICICI Bank went down by 3.82%, HDFC Bank -3.34% and SBI -1.55%.

Pharma stocks also felt the brunt. Index went down by 140.03 points or 3.36% to 4,029.27. Matrix Lab, Glenmark, Ranbaxy Labs, Wockhardt and Aurobindo Pharma fell 4.5-9%.

Oil & Gas Index lost 301.98 points or 3.31%, to settle at 8,814.46. Essar Oil, RNRL, Cairn India, ONGC and Reliance Petroleum were down 5-9%. Reliance Industries lost 2.45%.

Auto Index was down by 71.26 points or 1.8%, to close at 3,880.57. Escorts, Tata Motors, Bharat Forge, M&M, Amtek Auto, Ashok Leyland and Hero Honda were losers.

FMCG Index fell 1.38% to 2,175.94. Rei Agro, United Breweries, Godrej Consumer, Britannia, Marico and HUL fell 2.5-5%.

Biggest contributors to this fall were Reliance Industries, Infosys, ICICI Bank, ONGC, L&T, Satyam, Reliance Communication and HDFC Bank.

Turnover traded in markets was at Rs 77,584.67 crore. This includes Rs 11,925.03 crore from NSE Cash segment, Rs 61,185.99 crore from NSE F&O and balance Rs 4473.65 crore from BSE Cash segment.

However, another breaking news was bit of a positive for markets. Bank of America (BoA) has bought Merrill Lynch (ML) in $50 billion all stock deal. BoA will give 0.8595 shares for every 1 share of ML.

On the global markets, Asian markets closed sharply lower. Straits Times fell 3.27% and Taiwan Weighted lost 4.09%. Shanghai, Nikkei, Kospi and Hang Seng were shut today.

European markets were extremely under pressure due to this US financial concerns. FTSE was down 4%, CAC -4.7% and DAX 3.5%.

Markets Snapshot

Markets slide as Lehman files for bankruptcy, however recovers from days low

Sensex ends down 470 pts at 13531.3; reovers 380 pts from days low

Nifty ends down 155 pts at 4073; reovers 118 pts from days low

Nifty hits a low of 3955.4 and Sensex a low of 13150.8 during trading session

CNX Midcap Index down 4.26%, BSE Small-cap Index down 5%

Banking & Auto stocks lead recovery; Bank Index down 3.3%, Auto Index down 1.8%

Auto stocks; Maruti recovers 10%, Hero Honda 7.2%, M&M 4% from days low

Financials stocks: HDFC recovers 8.2%, SBI 6%, ICICI Bank 5.5%, PNB 4.3% from days low

Index stock recovery: Zee Ent recovers 7.5%, ACC 6.5%, Sterlite 6.2%Wipro 5.7% from days low

BSE Realty Index down 7.65%; Unitech down 7.7%, DLF down 7.2%, Orbit Corp down 12.5%, HDIL down 11.5%, Akruti City down 10%

BSE IT Index down 5.5%; Rupee depreciates further, hits 46/$1

Index Losers; Rel Infra down 9.7%, Satyam down 9.5%, Ranbaxy down 8%, Cairn India down 7.2%

Non-Index losers; Aptech down 13.5%, Ibulls Sec down 18.5%, Everonn System down 13.3%, Mercator Lines down 12.5%

Recent listing/ re-listings; Tulsi Extrusion down 20%, Nu Tek India down 17.3%, Suryalata Spinnnig down 18%, Landmark Prop down 15%, Sicagen India down 14%

NSE Advance Decline at 1:12

Total market turnover at Rs 77584.7 cr Vs Rs 75,014cr

F&O Snapshot

Nifty Futures end at 22 pts discount; add 8.8 lakh shares in OI

More than 50 % of FNO stocks sees cut of more than 5%

Hugh Unwinding in stock fut; more than 60% of stocks fut sees cut in OI

PCR slips below 0.90x, ends at 0.89 x

Hugh call writing at 4000 strike price (addition of more than 120%)

NSE F&O Turnover higher at Rs 61185.99 vs 57492.96 on Friday

Options Activity :

Nifty 4000 call adds 10.8 lakh shares

Nifty 4100 call adds 9.9 lakh shares

Nifty 4200 call adds 8.8 lakh shares

Nifty 3900 put adds 7.2 lakh shares

Nifty 3800 put adds 6.8 lakh shares

Nifty 4200 put sheds 8.9 lakh shares

Unwinding in Index Stocks:
Company                 OI
Reliance Ind             -8%
RPL                        -2%
L&T                        -6%
NTPC                      -4%
DLF                        -2%
Infosys                   -6%

Fresh Longs : Maruti

Fresh Shorts : IDFC , Idea , Icici Bank . Axis Bank , Unitech

Long Unwinding / Short Profit Booking :

IFCI, Reliance, Ispat, NTPC, ITC, SAIL, Naga Fert, RNRL, Chambal Fert, GSPL

Asia Today

Jakarta down 4.7%, Taiwan down 4%, Straits Times down 3.3%

Markets in China, Hong Kong, Japan & South Korea shut today

China cuts its lending rates by 27 basis points from Sep 16

China cuts its reserve requirements for small banks by 1%

Mkt is speculating on a U.S. rate cut at tomorrow's policy meeting

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