US markets slide as economic data continues to be abysmal; services sector contract the most since 1997 & private employment declined most since Nov 2002. Dow Jones ends down 486 points at 9140; NASDAQ down 99 points at 1682. Financials sector decline 9% after lower than expected results from bond issuers, AMBAC and MBIA.

US markets posted its biggest plunge following a presidential election as reports on jobs and service industries stoked concern that the economy will worsen even as president-elect Barack Obama tries to stimulate growth. Financials took a major hit.

The Dow tumbled 486.01 points, or 5.05%, to 9,139.27. The S&P 500 index lost 52.98 points, or 5.27%, to 952.77. The Nasdaq composite index declined 98.48 points, or 5.53%, to 1,681.64.

Indian ADRs slumped

Indian ADRs slumped on Wednesday. In Banking space, ICICI Bank was down 11.92% at $ 17.14 and HDFC Bank was down 10.78% at $ 66.08. In Telecom space, Tata Communication was down 13.80% at $ 19.68 and MTNL was down 9.55% at $ 3.03.

In IT space, Infosys was down 7.72% at $ 27.61, Patni Computers was down 6.25% at $ 5.70, Satyam Computers was down 4.37% at $ 14.88 and Wipro was down 4.28% at $ 8.06.

In other sectors, Tata Motors was down 8.24% at $ 4.68, Dr Reddy’s Labs was down 4.11% at $ 8.39 and Sterlite Industries was down 8.52% at $ 5.58.

Weakness in European stocks and lower US index futures pulled the market sharply lower in what was a volatile trading session. The BSE Sensex declined 511.11 points or 4.81% %, with index heavyweight Reliance Industries (RIL) plunging close to 13% on brokerage downgrade. The S&P CNX Nifty fell below the psychological 3,000 mark. Realty, banking and metal stocks dropped on profit taking after recent strong gains.

Firm Asian stocks had triggered an intra-day recovery on the domestic market in afternoon trade after it had slipped into the red in mid-morning trade after a strong start. The market had surged earlier in the day boosted by rally in Asian stocks, Democrat Barack Obama’s election as the next US president and expectations that a cut in interest rates by state-run banks would result in lower borrowing costs for the corporates.

The early rally was also triggered by a sentiment by the Commerce and Industry Minister Kamal Nath after trading hours on Tuesday, 3 November 2008, that the government will further ease foreign investment rules, including those relating to defence production.

Trading in US futures suggested the Dow would fall 82 points at the opening bell, as the focus shifted to the weak economy after Obama’s decisive win in the US presidential election. European markets which opened after the Indian market, fell as the spotlight moved back to the troubled economy after the US presidential election. Key benchmark indices in France, Europe and UK were down by between 1.44% to 1.88%.

Asian markets, which opened before the Indian market, surged boosted end of the uncertainty about who will lead the US economy in the midst of great financial peril. Key benchmark indices in China, Japan, Singapore, Hong Kong, and South Korea were up by between 1.76% to 4.46%. But the Taiwan Weighted fell 0.29%.

Obama captured the White House today, defeating Republican John McCain to make history as the first black to be elected as the US president.

The BSE 30-share Sensex plunged 511.11 points or 4.81% to 10,120.01. The Sensex surged 314.29 points at day’s high of 10,945.41 in early trade. The index slumped 579.60 points at the day’s low of 10,051.52 in late trade.

The S&P CNX Nifty was down 147.15 points or 4.68% to 2,994.95.

The market snapped gains of the last five trading sessions. From a low of 8,509.56 on 27 October 2008, the BSE Sensex had risen 2,121.56 points or 24.93% to 10,631.12 on 4 November 2008. But there has been a massive erosion in investors’ wealth this year. The barometer index BSE Sensex is down 10,166.98 points or 50.15% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,086.76 points or 52.27% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked a turnover of Rs 4,973 crore today as compared to a turnover of Rs 4,431.22 on 4 November 2008.

Nifty November 2008 futures were at 2973.50, at a discount of 21.45 points as compared to spot closing of 2994.95. NSE’s futures & options (F&O) segment turnover was Rs 38,550.94 crore, which was higher than Rs 33,758.52 crore on Tuesday, 4 November 2008.

The BSE Mid-Cap index was down 1.5% at 3,394.61 and the BSE Small-Cap index was down 1.74% at 3,964.78. Both the indices outperformed the Sensex.

The BSE Oil & Gas index (down 9.44% to 6,112.11), the BSE Metal index (down 6.88% to 5,451.74), the BSE Realty index (down 5.64% to 2,267) underperformed the Sensex.

The BSE Capital Goods index (down 4.42% to 7,591.64), the BSE PSU index (down 2.82% to 4,935.52), the BSE Teck index (down 2.64% to 2,142.67), the BSE Power index (down 2.5% to 1,736.92), the BSE Auto index (down 2.28% to 2,727,82), the BSE Bankex (down 1.87% to 5,633.94), BSE FMCG index (down 1.72% to 1,927.53), the BSE Consumer Durables index (down 0.82% to 2,108.29), the BSE IT index (down 0.57% to 2,734.35), the BSE HealthCare index (up 1.18% to 2,913.22), outperformed the Sensex.

The market breadth turned weak in late trade in contrast to a strong breadth earlier in the day. On BSE, 1,000 shares advanced as compared to 1,565 that declined. 73 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slumped 12.76% to Rs 1,269.45 after ABN Amro recommended a ’sell’ on the stock and cut its target price by whopping 38% to Rs 1,150 from Rs 1,850 earlier. The scrip was the biggest loser from the Sensex pack.

Jaiprakash Associates (down 10.01% to Rs 80.50), Grasim Industries (down 7.28% to Rs 1,049.45), Tata Motors (down 6.53% to Rs 181.20), and ACC (down 7% to Rs 470.95) were the other major losers from Sensex pack.

Telecom stocks fell on concerns that a government move to charge more for radio spectrum may impact their earnings. India’s largest telecom services provider by sales Bharti Airtel fell 4.54%.

India’s second largest telecom services provider by sales, Reliance Communication slipped 9.5% after Morgan Stanley cut price estimate on the stock by 45% to Rs 280.

As per reports, the government plans to increase fees telecom firms pay for using additional spectrum by up to 2% of the firms’ revenue, and would also levy a one-time charge for granting additional spectrum.

Metal stocks declined after recent sharp fall in metal prices on global recession worries. Hindalco Industries, Hiindustan Zinc, Sterlite Industries, Steel Authority of India fell by between 2.75% to 12.76%. Tata Steel, the world’s sixth largest steel maker, was down 10.05% after ArcelorMittal on reported quarterly operating profit and sales below expectations.

IT stocks were mixed amid strong rupee and on worries the US outsourcing business will be curtailed after Obama won the US presidential election. India’s third largest IT exporter by sales Satyam Computer Services rose 0.27% even as American depository receipt (ADR) fell 0.83% overnight.

India’s fourth largest IT exporter by sales Wipro rose 2.72% as ADR jumped 5.25%. India’s second largest IT exporter by sales Infosys fell 0.91%, even as ADR rose 4.84%. India’s largest IT exporter by sales Tata Consultancy Services slipped 0.5% off day’s high of Rs 548.90.

Obama has strong reservations on outsourcing from the US. He had made many statements during his election speeches that he would discourage outsourcing from the US when he comes into power.

The rupee strengthened 0.5% to 47.46/50 per dollar. A strong rupee affects the IT companies as they earn most of their revenues in dollar terms.

Bank stocks fell following reports private sector banks are expected to cut their lending and deposit rates in the next 15 days and will support credit lines to finance companies and mutual funds. India’s largest commercial bank State Bank of India was down 3.59% after its chairman O P Bhatt said on 4 November 2008 the bank was likely to cut interest rates by up to 50 basis points.

Bank of India gained 0.04% on reports it has cut its prime lending rate by 75 basis points to 13.25% with effect from Thursday, 6 November 2008. But Indian Bank fell 3,12% after early gains after the bank said yesterday it will consider cutting its lending and deposit rates by 50-75 basis points this week.

State Bank of Bikaner & Jaipur was flat at Rs 2651.70 after it cut its benchmark prime lending rate to 13.25% from 14%, effective 5 November 2008.

State Bank of Travancore rose 5% after bank fixed 20 December 2008 as the record date for 10 for 1 stock split.

India’s largest private sector bank by net profit ICICI Bank fell 1.62% even as the American depository receipt (ADR) spurted 7.28% overnight. ICICI Bank’s chief executive K.V. Kamath said on 3 November 2008, the bank will review interest rates in the next few days.

India’s second largest private sector bank by net profit HDFC Bank slipped 1.46%, even as ADR jumped 7.63% on Tuesday.

India’s largest home loan lender by operating income HDFC fell 8.63%.

As per recent reports, public sector banks are likely to cut deposit and lending rates by 50 to 75 basis points within one week. The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.

Most realty stocks plunged in late trade from their gains earlier in the day despite hopes lower interest rates will spur demand for residential properties. Realty majors, Unitech, Anant Raj Industries, Parsvnath Developers, DLF slipped by between 2.6% to 11.59%. Indiabulls Real Estate rose 5.15%.

IVRCL Infrastructures & Projects rose 0.33%, extending gains for the fourth session in a row, on strong Q2 results and healthy order book.

GMR Infrastructure spurted 4.26% on reports the company is set to buy a coal mine in Indonesia

Gammon India surged 6.76% extending gains for the fourth day in a row, on bargain hunting after a recent sharp fall caused by poor quarterly performance.

Healthcare stocks were mixed following reports the drug regulator National Pharmaceutical Pricing Authority has issued notices to Cipla, Ranbaxy Laboratories and Piramal Healthcare among others for overcharging. Cipla, Glenmark Pharmaceuticals, and Ranbaxy Laboratories fell between 0.38% to 2.06%. Dr. Redddy’s Laboratories, Piramal Healthcare rose between 0.04% to 1.18%. The drug regulator has asked these firms to deposit Rs 1630 crore with the government exchequer besides explaining the hike.

Auto stocks were mixed on reports the government may cut petrol and diesel prices to drum up support with voters ahead of key state elections later this month. Maruti Suzuki India and Hero Honda Motors rose by between 0.08% to 1.41%. Mahindra & Mahindra and Tata Motors fell by between 6.07% to 6.53%.

Ashok Leyland was fell 8.96% on reports of plans to reduce monthly production target for November 2008 to 1,500 units from the average 6,800 units it clocked each month in the first six months of this fiscal.

PSU OMCs fell on reports the government may cut petrol prices by around Rs 2 a litre and diesel by Rs 1 per litre to drum up support with voters ahead of key state elections later this month. BPCL, HPCL and Indian Oil Corporation fell by between 2.21% to 3.02%.

Meanwhile, Crude oil fell in New York as investors judged yesterday’s 10 percent gain excessive, and on forecasts that a government report will show U.S. crude inventories swelling as demand ebbs. Crude oil for December delivery declined as much as $3.47, or 4.9 %, to $67.06 a barrel on the New York Mercantile Exchange.

GAIL India slumped 15.34% even on signing a cooperation agreement with the Himachal Pradesh state government for extension of the proposed Dadri-Bawana-Nangal natural gas pipeline to the state.

Airlines stocks declined on reports of Kingfisher Airlines defaulting on payment of lease rentals on aircrafts. Kingfisher Airlines tumbled 16.57%. SpiceJet and Jet Airways fell by between 4.49% to 6.39%. The government had recently scrapped customs duty on jet fuel.

Shri Dinesh Mills was locked 10% upper limit at Rs 795.95 at 11:36 IST on BSE, on setting record date for 10-for-1 stock split.

Shree Cement rose 2.56% after cement shipments rose 12.81% to 6.25 lakh tonnes in October 2008 over October 2007.

Compact Disc India galloped 5.52% after the company said it would issue convertible warrants at a sharp premium to the prevailing stock price.

GVK Power & Infrastructure clocked the highest volume of 3.69 crore shares on BSE. Suzlon Energy (3.46 crore shares), Reliance Natural resources (1.76 crore shares), IFCI (1.29 crore shares) and Reliance Petroleum (1.19 crore shares) were the other volume toppers in that order.

Buy Dena Bank on declines with a stop loss of Rs 27 for a short term target of Rs 44
Buy IDFC with stop loss of Rs 60 and target of Rs 94 and Rs 114
Buy Axis bank with stop loss of Rs 580 and target of Rs 740

Bank stocks led the rally on the domestic bourses in late trade, with gains in key overseas equity markets supporting the upmove. The BSE Sensex jumped 293.44 points or 2.84%. Bank stocks surged on hopes interest rate cuts would help credit flow more freely. But IT stocks tumbled on worries outsourcing business will be affected if Barack Obama wins the US presidential election.

Trading in US index futures suggested the Dow would rise 187 points at the opening bell. European markets, which opened after Indian market, extended gains in morning trade led by banks, oils and pharma stocks, as investors geared up for the long-awaited US Presidential election day. Key benchmark indices in France, UK and Germany were up by between 1.74% to 2.12%.

Japan’s Nikkei average climbed 6.27% to its highest close in two weeks on Tuesday, 4 November 2008, as exporters gained on reports electronics maker Panasonic was planning to take over Sanyo Electric. But other Asian markets were mixed. Key benchmark indices in South Korea, China, and Taiwan were down by between 0.05% to 0.76%. Key benchmark indices in Hong Kong and Singapore were up by between 0.24% to 2.15%.

Australia’s All Ordinaries index moved between positive and negative zone after Australia’s central bank cut its benchmark cash rate by a bigger-than-expected 75 basis points on Tuesday, 4 November 2008, in an increasingly urgent effort to save the economy from the recession rapidly engulfing much of the developed world.

The BSE 30-share Sensex rose 293.44 points or 2.84% to 10,631.12. Volatility was high. After an early slide, a sharp recovery was witnessed in afternoon trade following a solid surge in Japanese shares and on a rate cut by Australia’s central bank. The index rose 330.80 points at the day’s high of 10,668.48 in late trade. The Sensex declined 221.46 points at day’s low of 10,116.22 in early trade.

The S&P CNX Nifty was up 98.25 points or 3.23% to 3,142.10.

The market has staged a solid rebound after a recent steep fall. From a low of 8,509.56 on 27 October 2008, the BSE Sensex has risen 2,121.56 points or 24.93% in five trading sessions. There has been a massive erosion in investors’ wealth this year. The barometer index BSE Sensex is down 9,655.87 points or 47.59% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,575.65 points or 49.86% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked a turnover of Rs 4416 crore today, 4 November 2008 as compared to a turnover of Rs 3,679.49 crore on 3 November 2008.

Nifty November 2008 futures were at 3167, at a premium of 24.90 points as compared to spot closing of 3142.10. NSE’s futures & options (F&O) segment turnover was Rs 33,758.52 crore, which was lower than Rs 34,113.94 crore on Monday, 3 November 2008.

The BSE Mid-Cap index was up 2.7% at 3,446.12 and the BSE Small-Cap index was up 2.75% at 4,035.11. Both the indices underperformed the Sensex.

The BSE Realty index (up 12.14% to 2,402.44), ), the BSE Bankex (up 6.56% to 5,741.04), the BSE Power index (up 5.66% to 1,781.38), the BSE PSU index (up 4.82% to 5,078.65), BSE FMCG index (up 4.77% to 1,961.19), the BSE Capital Goods index (up 4.61% to 7,942.57), the BSE Metal index (up 4.13% to 5,854.67), the BSE Oil & Gas index (up 3.09% to 6,749.51) outperformed the Sensex.

The BSE IT index (down 4.33% to 2,749.95), the BSE Teck index (down 0.82% to 2,200.80), the BSE HealthCare index (up 0.75% to 2,879.38), the BSE Consumer Durables index (up 1.01% to 2,125.78), the BSE Auto index (up 1.67% to 2,791.56), underperformed the Sensex.

The market breadth was strong. On BSE, 1,809 shares advanced as compared to 777 that declined. 69 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) came off the lower levels on reports it is considering options to re-open most of its closed petrol pumps, helped by an over 50% drop in crude oil prices. The stock was up 2.01% to Rs 1466, off the day’s low of Rs 1,376.

Ranbaxy Laboratories (up 9.88% to Rs 209.15), Jaiprakash Associates (up 9.82% to Rs 89.45) and Tata Power Company (up 8.32% to Rs 750.95) were the top gainers from the Sensex pack.

India’s largest electric equipment maker by sales Bharat Heavy Electricals (BHEL) rose 5.38% on reports it is planning to triple export orders to Rs 10300 crore by 2012 in a bid to hedge against currency fluctuations related to raw material imports.

India’s largest copper maker by sales Sterlite Industries fell 2%.

Bank stocks jumped on reports public sector banks are likely to cut deposit and lending rates by 50 to 75 basis points within one week. India’s largest commercial bank State Bank of India rose 6.5% extending gains after its chairman O P Bhatt said today the bank was likely to cut interest rates by up to 50 basis points.

Punjab National Bank, Bank of India, Union Bank of India, Federal Bank, IDBI Bank, Canara Bank, Indian Overseas Bank, Allahabad Bank and IndusInd Bank rose by between 1.75% to 11.61%.

A few public sector banks have already announced their decision to cut rates. Bank of Baroda rose 15.49% on a decision to reduce lending rates by 75 basis points (bps) with effect from Wednesday 5 November 2008.

However, Indian Bank fell 1.53% after the bank said it will consider cutting its lending and deposit rates by 50-75 basis points this week.

India’s largest private sector bank by net profit ICICI Bank rose 6.53% as American depository receipt (ADR) spurted 4.18% overnight. ICICI Bank’s chief executive K.V. Kamath said yesterday, 3 November 2008, the bank will review interest rates in the next few days.

India’s second largest private sector bank by net profit HDFC Bank rose 3.73% as ADR jumped 4.18% on Monday.

India’s largest home loan lender by operating income HDFC jumped 1.31%.

Finance Minister P Chidambaram today said the Reserve Bank of India (RBI) will keep a close watch on liquidity and state-run banks are ready to provide credit to the small and medium business sectors. The finance minister today met the chiefs of state-run banks.

The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.

Most realty stocks rose on hopes lower interest rates will spur demand for residential properties. Realty majors, Indiabulls Real Estate and Unitech jumped by between 12.48% to 14.49%. India’s largest real estate major by market capitalization DLF soared 14.66% to after denying reports that suggested its joint venture with Hilton was in trouble.

IT stocks tumbled on worries that if Barack Obama wins the US presidential election, the outsourcing business of the country will be curtailed and the direct impact will be on IT sector. India’s third largest IT exporter by sales Satyam Computer Services fell 7.41%.

India’s fourth largest IT exporter by sales Wipro fell 4.8% even as ADR rose 3.5%. Wipro is reported to be a front-runner to buy Citi group’s technology and infrastructure outsourcing arm, Citi Technology Services, for about $150 million and is likely to be announced by the end of the third quarter. India’s second largest IT exporter by sales Infosys slipped 5.47%, as ADR was down 2.7%.

India’s largest IT exporter by sales Tata Consultancy Services slipped 7.38%.

Zylog Systems rose 2.08%, after the company’s board approved acquisition of PEQ Consulting Inc and Fairfax Consulting Inc.

Democrat Obama has strong reservations on outsourcing and has made many statements during his election speeches that he would discourage this when he comes into power. The US Presidential Election will be held later in the day today.

Airline stocks soared on reports of further reduction in jet fuel prices. Jet Airways, Kingfisher Airlines and SpiceJet rose by between 3.55% to 6.23%.

Responding to the government’s decision to exempt jet fuel from customs duty three days ago, state-owned refiners have reportedly reduced the prices of the fuel by 4.5%. Earlier, there were anticipations that the next revision in aviation turbine fuel (ATF) prices may happen on 15 November 2008.

PSU OMCs rose on fall in crude oil prices. BPCL, HPCL and Indian Oil Corporation rose by between 1.43% to 6.86%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

US sweet crude oil dropped $1.19 to $62.72 a barrel today as traders continued to worry about the impact of a global economic slowdown on energy demand.

Cement stocks were mixed on muted dispatches figures for the month of October 2008. India’s largest cement maker by sales ACC fell 1.04% as cement shipments in October 2008 fell 3.4% to 1.70 million tonnes from 1.76 million tonnes a year earlier. Grasim Industries rose 2.78% and Ultratech Cement jumped 5.54% after Aditya Birla Group’s cement dispatches in October 2008 rose 1.9% from a year ago to 2.54 million tonnes. The group includes flagship Grasim Industries and unit Ultratech Cement, with combined cement production capacity of 35 million tonnes a year.

Telecom stocks rose on reports government will allocate spectrum for next generation wireless networks to successful bidders by the end of January 2009 after holding an auction as planned earlier in the month. India’s largest telecom services provider by market share Bharti Airtel jumped 4.31% while Reliance Communications, India’s second largest telecom services provider by sales rose 7.67%.

Rice exporters Lakshmi Energy & Foods, KRBL and LT Overseas were up 2.23% to 11.13 % on reports India would include the premium Pusa-1121 rice under the basmati brand, helping fetch higher prices.

Mercator Lines jumped 10.74%, on Singapore unit posting 94.4% surge in net profit to $24.9 million in Q2 September 2008 over Q2 September 2007.

Champagne Indage was locked at the upper limit of 5% on BSE after a foreign fund bought a large stake in the company.

Suzlon Energy surged 20.57% after the company said it was negotiating with Portugal-based Martifer for acquiring the latter’s 22.48% stake in the German firm REpower.

Siemens rose 11.8% on BSE, on bagging an overseas order.

Epic Energy gained 1.34% on bagging a contract to conduct energy audit in Arunachal Pradesh.

KEC International surged 10%, on bagging three orders aggregating Rs 235 crore from three different clients.

Balaji Telefilms slipped 4.84% as the Bombay High Court dismissed company’s petition not to end a long-running daily serial on Star TV.

Sun Pharmaceutical Industries declined 4.71% on BSE, after its US unit Caraco Pharmaceutical Industries got a warning letter from the Food and Drug Administration regarding its Detroit plant.

Suzlon Energy clocked the highest volume of 3.92 crore shares on BSE. Cals Refineries (2.31 crore shares), Unitech (1.7 crore shares), Reliance Natural Resources (1.7 crore shares) and GVK Power & Infrastructure (1.66 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 279.78 crore on BSE. Suzlon Energy (Rs 206.23 crore), State Bank of India (Rs 186.09 crore), Reliance Capital (Rs 184.76 crore) and ICICI Bank (Rs 151.46 crore) were the other turnover toppers in that order.

Buy XL Telecom & Energy only on declines with a stop loss of Rs 52.50 for a short-term target of Rs 109.
Buy Punj Lyod with stop loss of Rs 180 and target of Rs 220-Rs 240.
Buy Punjab National Bank with stop loss of Rs 435 and target of Rs 495-Rs 510.