MARKET UPDATE FOR DECEMBER 1

Weak European markets, fall in US index futures and dismal

economicdata which added to the concerns about the weakening

domestic andglobal economy pulled the domestic bourses to

intraday low in latetrade. The BSE 30-share Sensex lost

252.85 points, or 2.78%,shedding 486.81 points from the

day's high. The market reversedearlier strong gains in the

second half of the trading session. Volatility was high. After

an initial surge triggered by areshuffle of key government

posts on Sunday, 30 November 2008, themarket pared gains

in mid-morning trade as a survey showed fall inIndia's

manufacturing output in the month just gone by. The market

firmed up again in early afternoon trade but it shortly pared

gains. From that low, the market once again firm up in

afternoontrade.

Data showing fall in exports in October 2008, weak European

marketsand a further fall in US index futures pulled the

domestic bourseslower in mid-afternoon trade. The Sensex

swung 523.34 pointsbetween the day's high and low. Exports

fell an annual 12.1% in October 2008 to $12.82 billion, the
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first year-on-year fall in nearly three years, as slowing output at

home and weakening economies in key overseas markets slashed

demand. The data hit the market at about 14:20 IST. Meanwhile,

a survey showed India's manufacturing output shrank forthe

first time in 3-1/2 years in November 2008 as credit conditions

tightened and the global financial crisis hurt sentiment and

reduced demand. The ABN AMRO Bank purchasing managers'

index (PMI),based on a survey of 500 companies, fell sharply to

a seasonallyadjusted 45.8 in November 2008, the first time it

has contractedsince the survey began in April 2005 and well

below October 2008's52.2.

A reading above 50 signals economic expansion while a figure

below50 suggests contraction. Trading in US index futures

indicated the Dow could fall 158 pointsat the opening bell

on grim manufacturing figures from China.China's manufacturing

industry slumped in November 2008 as neworders, especially

from abroad, tumbled in the face of deepeningeconomic gloom

and financial uncertainty, two separate surveys onMonday, 1

December 2008, showed. Asian markets were mixed. Japan's

Nikkei average fell 1.35% asglobal recession fears prompted

investors to book profits afterlast week's rally, with exporters

such as Toyota Motor Corpslipping on a firmer yen. Key

benchmark indices in South korea andSingapore were down

by between 1.58% to 1.62%. But key benchmarkindices in

China, Hong Kong and Taiwan were up by between 1.25%

to1.59%.