The Hindu Business Line : Markets this Week

The Reserve Bank of India on Monday slashed its key short-term interest rate - Repo rate - by 100 basis points to 8 per cent, to ease pressure on the credit market and also maintain financial stability. This is seen as a clear signal to banks to reduce interest rates.

The benchmark sensex opened on a positive note on Monday, up 562 points in intra-day trade, and started its descent later in the day. The RBI's move to reduce the short-term lending rate had no impact on foreign institutions; FIIs were net sellers to the tune of Rs 817 crore, while domestic institutions were net buyers for Rs 216 crore.

The Sensex closed on a volatile session with a gain of 247 points, at 10223.09, while the wide-based Nifty closed at 3122.8.

Ranbaxy Laboratories announced that Daiichi Sankyo has acquired 52.5 per cent stake in the company.

This includes the 22 per cent acquired from the Singh family in an off-market deal, 20 per cent bought earlier through open offer, and balance through preferential allotment. The entire deal will be completed after Daiichi acquires another 12 per cent stake held by the Singh family over the next few days, which will take its total holding in Ranbaxy to around 64 per cent.

The markets opened on a cheerful note on Tuesday boosted by short covering and bargain buying by fund houses.

The Sensex closed at 10.683.39 points after gaining 460.30. On the NSE, the Nifty rose 112.10 points to 3,234.90.

The major gainers were Reliance Industries, ICICI Bank, Larsen & Toubro and HDFC.

Lower corporate earnings and concern over economic slowdown had hit the market sentiment on Wednesday.

The Benchmark Sensex, fell 513.49, and ended at 10,169.90 points. The Nifty Index shed 169.75, to close at 3,065.15.

IT majors such as Wipro, Infosys and TCS led the decline. Steel major Tata Steel fell to its lowest since September 16, 2004, after the downgrading by Moody's Investors Service.

Another metal stock, Sterlite Industries, plunged by 10 per cent to Rs 265, its lowest since June 14, 2006, following a drastic fall in copper prices in London Metal Exchange.

The Union Finance Minister, Mr P. Chidambaram, on Thursday said SEBI has asked foreign institutional investors to reverse transactions that involved overseas lending of Indian stocks to offshore entities.

Such a practice had often led to the creation of shortsale positions on the Indian stocks that were borrowed by the offshore entities through the participatory notes route.

Reliance Industries has reported lower than expected net profit at Rs 4,122 cr against Rs 3,837cr in the second quarter, the lowest for any quarter in two and a half years due to poor margins in refining operations.

It was yet another traumatic session for the markets as the indices were pummelled both by FIIs and investors, rattled by weak global cues and concern over wholesale recession.

While the Sensex finally closed at 9772 points down by398.20,the Nifty closed below the 3000 mark at 2943, down 122 points.

Grasim has reported a lower net profit for the September quarter. The consolidated profit declined by 16 per cent which is lower than the market consensus. Net profit stood at Rs 486 crore against Rs 495 crore reported during the corresponding period in the last year.

The stock markets went into a tailspin on Friday, losing over 10 per cent on relentless selling by domestic as well as foreign funds.

The markets declined heavily after another selling spree in Asian markets on fears of a severe global downturn. Metal, Realty, Auto, Bankex and PSU indices met with heavy selling pressure.

The BSE Sensex closed at 8,701, down a whopping 1,071 points against yesterday's close of 9,771.70. It touched a new low of 8,567 in the mid-session.

On the NSE, the battered Nifty closed at 2584, down by 359 points.

The RBI has kept the cash reserve ratio (CRR) and key short-term rates unchanged in its mid-term monetary policy review meeting held on Friday.

The Bank Rate has been kept unchanged at 6.0 per cent. The repo rate under the LAF is kept unchanged at 8.0 per cent. The reverse repo rate under the LAF is kept unchanged at 6.0 per cent.

Compiled by S Vasudevan
Podcast by R Venkatesan

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