Amid thin trade, the benchmark index remained weak in the afternoon trade as most of the Asian markets fell after more downbeat data about the US economy. Bank stock rose as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability.
The BSE 30-share Sensex was down 106.89 points, or 1.1%. After an initial slide triggered by weak global cues, the market recovered from lower level. However, the recovery proved short-lived. Volatility remained high as December 2008 derivatives contract expire today.
Asian stocks were mostly lower on signs of further deterioration in the world economy. In Japan, the Nikkei fell 2.37% as investors sold Toyota Motor Corp and auto-related stocks after the world's biggest automaker forecast its first-ever annual operating loss. Key benchmark indices in Hong Kong, China, South Korea were down by between 0.26% to 1.86%. The key benchmark indices in Taiwan & Singapore rose by 0.24% to 0.39%.
US stocks fell overnight on further deterioration in the housing market and worry over weak consumer spending. The Dow Jones slipped 100.28 points, or 1.18%, to 8,419.49. The S&P 500 index shed 8.47 points, or 0.97%, to 863.16. The Nasdaq composite index slipped 10.81 points, or 0.71%, to 1,521.54.
In more evidence of the deteriorating US housing market, data on Tuesday, 23 December 2008, showed the pace of existing home sales plunged a record 8.6% in November 2008 and new-home sales fell 2.9% last month. Another data on the same day showed, US gross domestic production fell 0.5% in July-September 2008 quarter.
A survey released on Tuesday showed just 38.7% of Americans went shopping during the final weekend before Christmas -- usually among the busiest shopping weekends of the year.
Data on Tuesday revealed that British gross domestic product fell 0.6% during the July-September 2008 quarter, faster than the previous estimate for a 0.5% contraction. On the same day, Spain, Europe's fifth-largest economy, declared it had stumbled into recession and New Zealand data showed it was suffering its worst contraction in eight years.
At 12:20 IST, the BSE 30-share Sensex was down 106.89 points, or 1.1%, to 9,580.06. At the day's low of 9,572.44, the Sensex fell 114.31 points in early trade. The Sensex fell 33.33 points at the day's high of 9,653.42 hit in mid-morning trade.
The S&P CNX Nifty was down 26.40 points, or 0.89%, to 2,942.25.
The BSE Mid-Cap index fell 1.09% and the BSE Small-Cap index declined 1.25%. Both the indices underperformed Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 658 shares rose as compared with 1,378 that declined. 74 shares remained unchanged.
Jaiprakash Associates, DLF, Tata Steel, Reliance Communications, Grasim Industries fell by between 2.23% to 3.89%.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.59% to Rs 1,240 on concerns the recent sharp fall in crude prices will hit refining margins
Oil exploration firm ONGC fell 1.26% as crude oil traded little changed near $39 a barrel in New York after falling yesterday, 23 December 2008, as a collapse in US house prices raised concern that the global recession will deepen, limiting demand for fuels. Oil for February 2009 delivery was at $39.12 a barrel, up 14 cents, on the New York Mercantile Exchange.
Capital goods stocks slipped on worries a slowing economy will crimp orders. Larsen & Toubro, Thermax, Crompton Greaves and ABB fell by between 1.07% to 3.13%. But India's largest electric equipment maker by sales Bharat Heavy Electricals rose 0.61% after it won two contracts worth Rs 2,100 crore from state-run utility NTPC
Auto stocks were mixed amid hopes rate cuts would spur demand which is mainly driven by finance. Mahindra & Mahindra and Hero Honda Motors rose by between 0.47% to 0.59%. But India's largest car maker by sales Maruti Suzuki India fell 2.64%.
India's largest commercial vehicle maker by sales Tata Motors fell 5.8% extending losses for the second straight day on reports the company may have to pump in at least $1 billion to revive premium British brands Jaguar and Land Rover that it bought earlier this year.
Bank stocks rose as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability. India's largest commercial bank State Bank of India (SBI) rose 0.98%. On Saturday, 20 December 2008, SBI slashed its lending rate by 75 basis points, to be effective from 1 January 2009. The bank also cut its deposit rates by 25 to 100 basis points across maturities.
Indian Overseas Bank, Union Bank of India, Punjab National Bank, Bank of Baroda were up by 0.29% to 2.86%.
India's largest private sector bank by net profit ICICI Bank rose 1.25% even as its American depository receipts (ADR) slipped 6.52% on Tuesday. Its advance tax payment declined 6% to Rs 470 crore in Q3 December 2008 over Q3 December 2007. ICICI Bank said on Friday, 19 December 2008, joint managing director Chanda Kochhar would succeed Chief Executive K.V. Kamath who retires in April 2009. Kamath, chief executive since 1996, will become non-executive chairman from May 2009 replacing N. Vaghul who retires.
India's second largest private sector bank by net profit HDFC Bank declined 1.51% as its American depository receipt (ADR) slipped 11.02% on Tuesday, 23 December 2008.
India's largest home loan lender by operating income Housing Development Finance Corporation (HDFC) fell 0.31% to Rs 1,472 off day's high of Rs 1,522.80. It cut its retail lending rates by 50 basis points, effective 22 December 2008. HDFC announced the rate cut after trading hours on Friday, 19 December 2008.
Outsourcing firms were mixed amid a weaker rupee. India's third largest IT exporter by sales Wipro jumped 3.42% after the company said it is buying Citi Technology Services (CTS), the India-based captive provider of information technology services and solutions to Citi entities worldwide, for $127 million in an all cash deal. The company announced the acquisition after trading hours on Tuesday.
India's second largest IT exporter by sales Infosys rose 0.57% as its ADR rose 1.08% on Tuesday. Infosys sees the Indian IT industry going through a slow phase of growth for some time, its chief executive said last week. However, India's largest IT exporter by sales Tata Consultancy Services fell 1.68% to Rs 492 off day's high of Rs 504.40.
Satyam Computer Services, India's fourth largest IT major by sales, plunged 15.56% on reports the World Bank has barred the company from conducting any business with it for eight years due to data theft and paying bribes to its staff. The World Bank has been an important client for Satyam. The multilateral agency had signed $100-million billing per annum contract. Satyam ADR fell 11.02% on Tuesday.
The stock had slipped 13.55% on Tuesday on rumours its founder and chairman Ramalinga Raju had resigned from the board. As per unconfirmed reports, Raju has put in his papers and he awaiting the company board's decision on the issue. The company had said on Thursday, 18 December 2008, said its board will meet on 29 December 2008 to consider buyback of shares, a move aimed at boosting investor confidence. The stock had slumped 30.22% to Rs 158.05 on Wednesday 17 December 2008 after it called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju, bowing to investor pressure.
The Indian rupee slipped beyond 49 per dollar to a two-week low on Wednesday, falling for a fourth consecutive session, as refiners stepped up their dollar purchases to pay for oil imports. The partially convertible rupee was at 49.08/10 per dollar, 0.6% weaker than Tuesday's close of 48.78/81. A weaker rupee augurs well for IT firms which derive a lion's shares of revenue from exports.