MARKET UPDATE FOR NOVEMBER 20


Weak global markets pulled the domestic bourses down for the

seventh consecutive trading session. It was a choppy trading

session with wild swing in share prices. The BSE 30-share Sensex

lost 322.77 points, or 3.68%. World stocks fell on worries of a

deep global recession and fears that there could be another wave

inthe global credit crisis. Selling by foreign funds pulled the

domestic bourses lower. As perthe provisional data released

by the stock exchanges after tradinghours, foreign

institutional investors (FIIs) today, 20 November2008, sold

shares worth a net Rs 762.94 crore. FIIs are dumping

stocks in Indian and other emerging markets to shore up resources

to beat the global liquidity crunch. FII outflow reached Rs52,820.80


crore in calendar 2008, so far, till 19 November 2008, as

against an inflow of a huge Rs 71,440.10 crore in the

correspondingperiod last year. Volatility was high. The marke

t cut losses in the last 20 minutesof trade as bank shares

recovered on rate cut hopes. Earlier, anintraday recovery

from a steep slide had proved short lived. A further fall in

inflation has raised hopes the central bank willcut interest

rates further to shield the domestic economy from theglobal

economic slowdown. Lower interest rates boost stocks as

lower borrowing costs help lift corporate profits. Inflation based

on the wholesale price index rose 8.90% in the 12 months to 8

November 2008, marginally below the previous week's

annual rise of8.98%, data released by government data at

about 12:00 IST showed.Inflation has been softening since

peaking at 12.91% on 2 August2008. The RBI has aggressively

cut rates over the past two months. Therepo rate has been cut

by 150 basis points to 7.5% since Octoberthis year and the

cash reserve ratio, the proportion of depositsthat banks have

to keep with the central bank, has been reduced by350 basis

points to 5.5%. In response, government owned bankslowered

prime lending rates by up 75 basis points, but largeprivate

lenders like ICICI Bank and HDFC Bank are yet to do so. European

stocks fell, led lower by pharmaceuticals, banks and

commodities stocks, as investors remained nervous due

to theprospect of a prolonged global economic downturn.

The key benchmarkindices in France, Germany and UK

were down by between 1.23% to1.88%. Trading in US futures

suggested Dow could fall 47 points atthe opening bell. Asian

shares tumbled as economic data indicated a global recession

could get even uglier. In Japan the Nikkei 225 average slumped

nearly 7% as exports registered a biggest annual decline in

sevenyears in October 2008, the latest data showed. Key

benchmarkindices in Hong Kong, South Korea, Singapore,

China and Taiwan weredown by between 1.67% to 6.7%.

Federal Reserve officials on Wednesday, 19 November 2008,

paredtheir outlook for growth in the world's biggest economy

to minimallevels. The weaker forecast came on a day in which

data showed USconsumer prices in October 2008 posted their

biggest drop sincemonthly records began in 1947, while

new-home buildings slumped tofresh lows. US stocks plunged

to their lowest in five-and-a-half years onWednesday, 19

November 2008, as investors girded for a lengthyeconomic

downturn and automotive executives predicted afar-reaching

calamity without a government lifeline. The Dow Jonesindustrial

average tumbled 427.47 points, or 5.07%, to 7,997.28.The

Standard & Poor's 500 Index fell 52.54 points, or 6.12%, to806.58.

The Nasdaq Composite Index lost 96.85 points, or 6.53%, to1,386.42.

Turmoil in the US commercial real estate market deepened on

Wednesday as securities backed by loans on commercial properties

such as office buildings fell in value. Citigroup shares tumbled to

a 13-year low as investors questioned survival prospects onconcerns

about mounting losses from credit cards, mortgages and

toxic debt. The BSE 30-share Sensex was down 322.77 points, or

3.68%, to8,451.01. At the day's high of 8,540.46 hit in late trade,

theSensex fell 233.32 points. The Sensex lost 457.38 points at

theday's low of 8,316.39 in early afternoon trade. The S&P CNX Nifty

was down 81.85 points, or 3.11%, to 2,553.15. Fears of a global

recession, slowdown in the domestic economy andselling by

foreign funds have pulled the Sensex down 2,085.15points or

19.79% in the last seven trading sessions from 10,536.16on 10

November 2008. The barometer index is down 11,835.98 points

or 58.34% in the calendar year 2008 so far from its close of20,286.99

on 31 December 2007. It is 12,755.76 points or 60.14%below its

all-time high of 21,206.77 struck on 10 January 2008. The BSE

clocked a turnover of Rs 2,893 crore today as compared to a

turnover of Rs 3,545.97 crore on 19 November 2008. Nifty

November 2008 futures were at 2574, at a premium of 20.85

points as compared to the spot closing of 2553.15. Turnover in

NSE's futures & options (F&O) segment was Rs 37,983.83

crore, whichwas lower than Rs 41,656.37 crore on Wednesday,

19 November 2008. The market breadth, indicating the overall

health of the market,was weak. On BSE, 594 shares rose as

compared with 1,899 thatdeclined. 68 shares remained unchanged.

The BSE Mid-Cap index down 3.42% to 2,895.79 and The BSE

Small-Capindex down 3.09% to 3,385.34. Both the indices


outperformed theSensex. The BSE Realty index

(down 8.3% to 1,679.06), the BSE ConsumerDurables index


(down 4.95% to 1,763.93), the BSE Oil & Gas index

(down 4.64% to 5,252.01), the BSE Bankex (down 4.32% to 4,398.29),

the BSE Metal index (down 4.18% to 4,250.39), the BSE Auto

index(down 4.14% to 2,252.97) underperformed the Sesex.

The BSE FMCG index (down 0.51% to 1,856.56), the BSE Health


Careindex (down 1.44% to 2,764.43), the BSE PSU index

(down 1.91% to4,368.94), the BSE Power index (down 2.24% to

1,495.70), the BSE ITindex (down 2.77% to 2,343.84), the BSE

Capital Goods index (down2.93% to 6,209.38), the BSE Teck

index (down 3.49% to 1,831.93)underperformed the Sensex.

Reliance Infrastructure (down 6.7% to Rs 425.35), Jaiprakash

Associates (down 6.66% to Rs 59.55), Tata Power Company


(down 6.39%to Rs 633.90) were the major losers from

the Sensex pack. NTPC (up 1.54% to Rs 138.10), Ranbaxy

Laboratories (up 0.79% to Rs218.10) and Hindustan Unilever

(up 0.32% to Rs 234.30) were themajor gainers from the

Sensex pack. State Bank of India (SBI) led recovery in banking

pivotals on hopesa further fall in interest rates may boost lending

growth. SBI roserose 1.21% to Rs 1,092.55, recovering from

the session's low of Rs1025. Though down 7.87% to Rs 320.35,

India's largest privatesector bank by net profit ICICI Bank, recovered

sharply from theday's low of Rs 308.50. ICICI Bank's ADR

lost 13.63% on Wednesday,19 November 2008. India's second

largest private sector bank by netprofit HDFC Bank slipped 7.3%

as ADR slumped 10.14% on Wednesday. India's largest home loan

lender by operating income HDFC fell5.59% on fears Citigroup

may sell its stake in the company tooffset its sub-prime related

losses. India's largest private sector company by market

capitalization andoil refiner Reliance Industries (RIL) slipped

6.58% to Rs 1,058.60on concerns a global slowdown would hit

demand for petrochemicals. Oil exploration firms fell on falling

crude oil prices. India'slargest oil exploration firm by revenue

ONGC fell 0.33%. CairnIndia slipped 5.37% on reports the

union cabinet has rejected anoil ministry proposal to award a

deepwater block off the west coastto the company. Oil price

s dropped for a fifth straight session to below $53 abarrel. Oil

on Wednesday, 19 November 2008, fell to its lowestsettlement

since late January 2007 as investors expect a sharpslowdown

in demand for a commodity that just in July this year hita

record high at about $147 a barrel. Real estate stocks declined

after real estate body, Confederationof Real Estate Developers'

Associations of India (CREDAI) askedrealty firms to lower prices

given the general slowdown in theeconomy. Unitech, Indiabulls

Real Estate, DLF, Housing Development& Infrastructure, and

Omaxe were down by 5% to 11%. Sobha Developers dropped

1.12%, as reports of the realty firmcutting property prices raised

concerns of fall in margins. Metal stocks declined as worries that

global economic slowdown willhit demand offset imposition of

5% import duty on steel by thegovernment on 18 November

2008 to protect the domestic industry.Hindalco Industries,


Sterlite Industries, Tata Steel, Jindal Steel,JSW Steel, National

aluminum Company fell by between 0.4% to 7.96%. Steel

Authority of India slipped 0.51% on reports it may considercut


in production due to the global economic slowdown. Hindustan

Copper declined 10.03% on reports it expects 10% fall in

production in the year ending March 2009 IT stocks slipped on

mounting worries about the US economy afterthe Federal Reserve

slashed its growth forecasts for the economy.India's second

largest IT exporter by sales Infosys slipped 3.82%,as ADR

fell 1.23% on Wednesday. India's fourth largest IT exporter

by sales Wipro lost 1.33% as ADR lost 7.25% on Wednesday. India's

third largest IT exporter by sales Satyam Computer Services lost

0.02% as ADR fell 6.09% overnight. India's largest IT exporter

by sales Tata Consultancy Services wasdown 2.36% despite reports

it has emerged the lowest bidder for ane-governance contract to

computerise Employee State InsuranceCorporation and provide

smart cards, beating Wipro and Infosys. TCSbid at Rs 1677 crore,

suggest reports. Indian IT firms derive a lion's share of revenue

from exports toUS. The Indian rupee recovered from a record

low of 50.60 perdollar reached in early trade on Thursday, helped

by heavy dollarselling by the central bank. The partially convertible

rupee was at50.00/02 per dollar, off a high of 49.94, and little

changed fromits close of 50.02/03 on Wednesday. A stronger

rupee affects theoperating margins, as IT firms earn most of

their revenues fromexports. Auto stocks fell on a worsening

global economic outlook anddeclining domestic demand due to

high interest rates and higherfuel prices. Maruti Suzuki India,

Mahindra & Mahindra, Hero HondaMotors, Tata Motors slipped

by between 0.64% to 6.52%. Capital goods stocks slumped on

worries global economic slowdownwould crimp orders. Larsen &

Toubro, Bharat Heavy Electricals andSuzlon Energy fell by

between 2.72% to 3.46%. Cement stocks were mixed despite

slowdown in cement demand. Ambujacements, Grasim Industries

fell by between 1.27% to 3.61%. However,Ultratech Cement,


ACC rose by between 1.55% to 1.58%. The 205 million-tonne


domestic cement industry has seen the lowestdespatch growth

rate in the last four years. During April-October2008, the

despatches growth stood at 6.27% against 8.7% during the

same period last year. Telecom firms slipped amid a controversy

regarding the award of 2Gtelecom licenses. Bharti Airtel, reliance

Communications and IdeaCellular fell by between 3.44% to

7.92%. The controversy centres onaward of 2G telecom licenses

for a total of Rs 9000 crore on 10January 2008. It has been alleged

that this amounted to severeunderpricing, causing a loss of

almost Rs 51000 crore to theexchequer. FMCG stocks edged


higher on defensive buying as investors find asafe haven in

these stocks in slowing economy. Britannia India,Hindustan

Unilever, Nestle India and REI Agro rose by between 0.06%to

0.32%. While, India's largest cigarette maker by sales ITC fel

l0.33%. GVK Power & Infrastructure clocked the highest

volume of 1.78 croreshares on BSE. Suzlon Energy


(89.04 lakh shares), ReliancePetroleum (86.83 lakh shares), Reliance

Natural Resources (72.29lakh shares) and Housing

Development & Infrastructure (70.31 lakhshares) were the other

volume toppers in that order. Reliance Industries clocked the

highest turnover of Rs 293.78 croreon BSE. Reliance

Capital (Rs 154.88 crore), State Bank of India (Rs29.44 crore),

Educomp Solutions (Rs 128.72 crore) and ICICI Bank(Rs 124.97 crore)

were the other turnover toppers in that order. Cummins India

tumbled 3.96% after the board approved sale of itspower

generation rental business. Asian Paints plunged 4.72% on

shutting phthalic anhydride plant inGujarat due to inventory

build up and for maintenance. Wockhardt slipped 1.38% on

reports US drug major Eli Lilly has suedthe company for

patent infringement on antidepressant drug.