The BSE 30-share Sensex was down 133 points. The Nifty was also down 1.5 per cent to 2,581.
Foreign institutional investors (FIIs) have pressed heavy sales this year. FII outflow in February 2009 totaled Rs 2707 crore. FII outflow in calendar year 2009 totaled Rs 9128.30 crore (till 5 March 2009). Globally, investors are pulling out money from hedge funds, forcing hedge fund managers to dump assets.
At the same time, global banks and insurers are selling assets after amassing $1.2 trillion of credit losses and writedowns since the start of 2007. More recently, fears have intensified about the exposure of Western European banks and companies to deteriorating economic conditions in Eastern Europe.
Domestic institutional investors (DIIs) have been absorbing selling by foreign funds.
However, due to political uncertainty, investors are unlikely to build large positions with general election to be held in mid-April 2008 to mid-May 2009. More so at a time when it is highly unlikely that either Congress or BJP comes to power on its own i.e. without the support of other smaller/regional parties.
The market may recover if a coalition led either by Congress or BJP comes to power. But the recovery will be subject to BJP or Congress led coalition coming to power without a support from the Left front which is against key economic reforms. The market will then look for whether the new government which comes to power undertakes second generation reforms that could bring India back on a strong growth path witnessed in five years between 2003 and 2008.
Meanwhile, volatility in the rupee and global commodity prices have added to the woes of India Inc. The recent sharp slide in the rupee will increase in the cost of servicing overseas debt to the extent of the rupee's slide unless the company (which has overseas borrowings) has adopted an effective hedging strategy.
Asian markets were trading lower today, 9 March 2009, on concern corporate earnings will deteriorate further as the World Bank predicted the global economy to shrink for the first time since World War II. Key benchmark indices in China, Hong Kong, Japan, Singapore, and Taiwan were down by between 0.55% and 2.60%.
The market breadth, indicating the overall health of the market, was weak on BSE with 1346 shares declining as compared with 677 that advanced. A total of 73 shares remained unchanged.
BSE clocked a turnover of Rs 1021 crore by 12:25 IST as compared to Rs 718 crore by 11:25 IST.
Among the 30-member Sensex pack, 27 slipped while only 3 of them rose. Tata Motors (up 0.25%), and Grasim (up 0.22%), edged higher from the Sensex pack.
India's largest pharma company by market capitalisation Sun Pharmaceuticals plunged 4.11% to Rs 979.60. After market hours on Friday, 6 March 2009, Sun Pharma said it extended its tender offer to Taro Pharmaceuticals till 20 March 2009. The extension was to comply with an order issued by the Supreme Court of Israel prohibiting the closing of the offer until the court decides on the appeal made by Taro's non-promoter directors against the offer.
Rate sensitive realty stocks fell on recent reports falling interest rates have failed to revive housing demand. DLF (down 3.79%), Indiabulls Real Estate (down 3.44%), Housing Development & Infrastructure (down 6.97%), fell. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
India's largest FMCG major by sales Hindustan Unilever slumped 4.55% to Rs 213.75 extending a fall of 8.44% in the previous three trading session triggered by foreign brokerage JPMorgan Chase & Company cutting its rating on the stock to 'underweight' from 'neutral', citing weakening growth and increasing competition. It was the top loser from the Sensex pack.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 2.02% to Rs 1147.05 on fears a worsening global economy will hit demand for petrochemicals
India's largest state-run oil exploration firm by sales Oil and Natural Gas Corporation fell 1.12% to Rs 665.90 even as the company trashed a report by investment banking firm Goldman Sachs, saying Goldman's analysis of explorer was devoid of basic facts and was aimed at hurting the company's image. The Goldman report had on Friday, 6 March 2009 questioned corporate governance in ONGC because it was subsidising fuel prices under government orders.
Subsidy discounts to public sector oil marketing companies is a practice of the government since 2003-04, it said. Subsidy discounts are applicable to crude produced from nominated blocks only, where there is no production sharing or profit oil sharing with the government, it added.
ONGC further said it acquired 43 overseas oil and gas assets in lands in just six years. It acquired properties abroad through its foreign arm ONGC Videsh (OVL). OVL had only one property in 2003. The percentage of overseas production to total production of ONGC group has moved from 7.23% in 2002-2003 to 15.42% in 2007-08. The company added 255.01 million tonne oil equivalent (MTOE) of reserves through acquisition of overseas properties since 2003-04, it said.
Pointing at the cash flow of its wholly-owned subsidiary, ONGC said OVL has already paid back a loan amount of Rs 11,820 crore. The parent company has extended total Rs 25,684 crore to OVL as loans.
India's largest private sector oil exploration firm by sales Cairn India gained 2.01% after the price of crude oil rose to its highest in about six weeks. Crude oil for April 2009 delivery rose 97 cents to $46.49 a barrel today, 9 March 2009 on the prospect of production cuts by organisation of petroleum exporting countries (OPEC).
India's largest pharma company by sales Ranbaxy Laboratories fell 1.95% to Rs 138.55, reversing early gains. The stock had risen as much as 3.18% to Rs 145.80 earlier in the day after it received final approval from the US Food and Drug Administration (USFDA) to market and manufacture Ramipril capsules in the strengths of 5 milligrams (mg) and 10 mg respectively. Ramipril helps to reduce the risk of myocardial infarction, stroke or death from cardiovascular causes.
On Friday, 6 March 2009, Ranbaxy received an approval from Australia's Therapeutic Goods Administration (TGA) to market its anti-fungal tablets Serbifin Terbinafine in that country.
Capital goods stocks fell on worries a slowing economy will crimp orders. ABB (down 1.31%, Bharat Heavy Electricals (down 2.11%), and Siemens (down 3.75%), slipped.