Sensex closes over 250 points down

MUMBAI: Equities gave away gains and breached important supports to end sharply lower on Monday, marred by worries over weak global economy and domestic growth concerns. All the sectoral indices ended in the negative terrain with major losses in interest rate sensitive sectors.

Markets opened higher following better than expected GDP figures and cooling down of inflation Friday. Indices continued to remain firm until the out-going Finance Minister P Chidambaram said India will see a slowdown in growth. He however added that inflation will moderate and growth will be satisfactory.

After the recent terrorist attacks in Mumbai, the central government-- under tremendous pressure from all quarters-- shuffled portfolios and the finance minister has been made the home minister while Prime Minister Manmohan Singh will be doubling as the finance minister for now.

While the market was trying to come to grips with the bearish sentiments, weak export data, fall in European markets and lower GDP forecasts by Nomura Securities for India pulled equities sharply down.

Nomura Financial Advisory and Securities has lowered its India FY09 GDP growth forecast from 7.2 per cent to 6.8 per cent, and slashed FY10 forecast from 6.9 per cent to 5.3 per cent. The main reasons: slumps in exports and capex and expected second-round effects.

India's exports fell for the first time in seven years by 12 per cent in October on sagging demand from the world's two biggest consumer markets -- the US and Europe -- widening the trade deficit further.

Exports in October 2008-09 declined 12.1 per cent to $12.8 billion from $14.58 billion a year ago, causing job losses in the sector, while merchandise imports grew by 10.6 per cent to $23.36 billion from $21.12 billion in the year-ago period.

After a rally last week, European markets opened lower led by fall in of banks and metals shares as bad economic data continued to hurt sentiments.

“Markets gave up all the gains and ended in the red on continuing economic concerns and weak global cues. Concerns persist on the continuing slowdown in the economy and the extent and timing of measures expected to be taken up by the government / RBI. Weakness in European markets also played on the market sentiments leading to liquidation of positions,” said, Dipen Shah, Vice President, PCG – Research.

Bombay Stock Exchange’s Sensex closed at 8,839.87, down 252.85 points or 2.78 per cent. The index touched intra-day low of 8,803.34 and day high of 9326.68.

National Stock Exchange’s Nifty ended at 2682.90, down 72.20 points or 2.62 per cent. The broader index touched a low of 2669.50 and high of 2832.85.

“We were expecting Nifty to surpass important support of 2860 but it failed to do so. Negative opening of European markets hit sentiments further. Nifty fell below previous low of 2690 forming a bar reversal pattern which is a bearish signal,” said Shrikant Chouhan, technical analyst at Kotak Securities.

“2630 is an important level on the Nifty and if this is broken then a further sell-off to 2500 is expected. If Nifty closes below 2500 then the market may retest previous lows of 2250 in the near-term. On the higher side, in case the market sustains above 2785/9300 (Nifty/ Sensex) then it may again try to reach 2860 levels,” Chouhan added.

BSE Midcap Index closed 1.36 per cent lower and BSE Smallcap Index ended 0.21 per cent down.

Sensex losers comprised DLF (-9.96%), Martuti Suzuki (-9.40%), ICICI Bank (-7.21%), Reliance Infrastructure (-6.95%), BHEL (-6.71%) and Ranbaxy Laboratories (-4.96%). Gainers included Grasim Industries (1.75%), Tata Steel (1.69%), Tata Consultancy Services (1.06%), Sterlite Industries (0.74%) and Reliance Communications (0.43%).

Amongst the sectoral indices, BSE Realty Index plunged 5.34 per cent, BSE Auto Index fell 4.64 per cent, BSE Bankex declined 3.87 per cent and BSE Capital Goods Index was down 3.79 per cent.

Auto sales for the month of November fell sharply due to ongoing economic slowdown and recessionary pressure in the US and other European countries. While sales of Maruti Suzuki fell last month to 52,711 units from 69,699 units a year ago, TVS Motor's November sales numbers dipped to 99402 units from 112766 units on YoY basis.

Analysts feel that with the slowdown in the economy, outlook on the auto sector will remain bleak for quite some time.

Market breadth on BSE showed 1132 declines against 986 advances.

In Europe, FTSE 100 was down 2.29 per cent, DAX fell 3.22 per cent and CAC 40 plunged 2.56 per cent.

US markets too are likely to open in the negative as indicated by the futures. US Dow futures were down 1.75 per cent, US S&P 500 futures fell 2.09 per cent and Nasdaq future were lower by 2.07 per cent. The market is anticipating some disturbing economic data including jobs data later this week.

SBI adjudged best bank in 2008

Mumbai, Dec 01: State Bank of India has been adjudged the Best Bank of the Year 2008 by London-based 'The Banker' magazine of the Financial Times group, the bank said.

State Bank Chairman, O P Bhatt, received the award from Stephen Timewell, the Editor-in-Chief of the magazine, a press release on Monday said.

The award is decided on the basis of intensive research and analysis of financials and performance of prominent banks and clearly SBI emerged as the winner and best bank in the country, the release said.

The awards presentation was held at the ballroom of The Dorchester Hotel, London, November 26.

Air India fuel surcharge to fall by Rs 400 from Tuesday

Monday 01 December, 2008: Flag carrier Air India is all set to reduce fuel surcharge on all domestic flights by Rs 400 from Tuesday, making it the first airline to slash fares after a substantial cut in jet fuel prices.

The airline currently levies a fuel surcharge of Rs 2,750 on flights up to 750 km and Rs 3,100 beyond that distance.

The surcharge will now be reduced by Rs 400 effective for all bookings made from Tuesday, an Air India official said on Monday.

"This will amount to a reduction of 14.5 per cent on total fare," the official said.

State-run oil companies had last week cut Aviation Turbine Fuel (jet fuel) prices by Rs 2,480 per kilolitre, effective December 1 - the sixth such cut since August this year.

Besides reducing ATF prices, government has abolished five per cent customs duty on jet fuel.

It is also planning to amend the Central Sales Tax Act in the coming session of Parliament to include ATF in the list of declared goods so that only a flat four per cent tax is imposed on it across the country.

At present, state sales tax ranges anything from four to 30 per cent.

Civil Aviation Minister Praful Patel had earlier appealed to airlines to cut fares and reciprocate the measures taken by the government to help the ailing industry.(

BSNL, MTNL to hire 700 management trainees

New Delhi, Nov 30: Even as companies are laying off people during slowdown time, two government-owned telecom companies, BSNL and MTNL, plan to hire about 700 professionals over the next one year.

A BSNL official said the PSU will recruit about 300 management trainees through competitive examination to be held on an all-India basis, while MTNL will hire 392 in the same capacity, officials said.

BSNL has a workforce of 3.5 lakh and is seen as a bloated organisation with an aging workforce. It operates all over India except Delhi and Mumbai. NYSE-listed MTNL has a leaner workforce, and operates only in Delhi and Mumbai.

The trainees will be hired for telecom operations, marketing, finance, human resource and IT functions.

Private telecom players who have been expanding networks in the country usually hire most in the sales and marketing streams.

Most of the top-rung telecom companies outsource non-core operations, keeping with themselves core and commercial functions. That has made them leaner, increasing their per employee return and keeping cost under control, a market analyst said.