Inflation thwarts recovery

Weak global cues and unwinding of positions by investors triggered a 485-point fall for the Sensex today. The market mirrored the Asian markets.

Hang Seng, Nikkei and Jakarta Composite slipped 5-7% each. The Sensex resumed on a bearish note at 9,755, which is 365 points below its last close of 10,120 and accumulated losses of 485 points by afternoon on across-the-board selling pressure to touch the day's low of 9,635. However, short covering in index pivotal stocks saw the Sensex erase marginal losses of 120 points towards close and end the session at 9,734, down 386 points. Nifty declined by 102 points to close at 2,893. The highlight of the day was the smart recovery by the indexes in the afternoon session, when the Sensex was within inches of turning positive and Nifty turned green. But higher inflation figures for the week ended October 25, 2008 played spoilsport and the indices ended sharply lower.

The market breadth was heavily tilted in favour of losers as 1,633 stocks declined and 869 stocks advanced. Eighty three stocks remained unchanged. Most of the sectoral indices were battered. The BSE Metal lost heavily and dropped 8.41% followed by BSE Oil & Gas index (down 4.83%), BSE Teck (down 4.71%), BSE IT (down 4.26%), BSE Bankex (down 3.41%) and BSE Auto (down 2.92%). The second-rung benchmark indices the BSE mid-cap index and the BSE small-cap index also slipped over 2% each.

Out of the 30 Sensex stocks only six stocks managed to end in the green. Among the major losers Tata Steel tanked 13.67% at Rs186.25. Tata Motors slumped by 12.17% at Rs159.15, Sterlite Industries shed 11.33% at Rs237.55, Reliance Industries crumbled by 7.71% at Rs1171.55, Hindalco Industries dropped 7.50% at Rs56.70 and Bharti Airtel slipped by 6.62% at Rs639.45. Other front-line stocks also declined by around 1-6% each. However, JP associates bucked the downtrend and advanced by 4.10% at Rs83.80, while Ranbaxy Laboratories, Hindustan Unilever, DLF, Mahindra & Mahindra and Bharat Heavy Electricals inched up marginally.

Over 3.30 crore shares of GVK Power and Infrastructure changed hands on the BSE followed by Suzlon Energy (2.27 crore shares), Reliance Natural Resources (1.39 crore shares), Unitech (1.21 crore shares), IFCI (1.16 crore shares), Reliance Petroleum (1.03 crore shares) and Alkali Metals (1.02 crore shares).