Closing Report

 
 
Market slumps in late trade
 
The key benchmark indices slumped to fresh intraday lows in late trade, underperforming mostly
lower global stocks, with markets keeping a watchful eye on events out of Ireland and wary ahead of
possible China policy tightening. The market breadth was weak. The BSE 30-share Sensex was
provisionally down 376.11 points or 1.89%, up close to 50 points from the day`s low and off close to
425 points from the day`s high. Index heavyweight Reliance Industries (RIL) extended initial losses.
Banking, consumer durables, IT, metal and realty stock fell.

Year-end profit taking by foreign funds may continue to weigh on the domestic bourses in the near
term. The market has come off soon after hitting a record closing high early this month.

Intraday volatility was high as traders rolled over positions in the derivatives segment from the near-
month November 2010 series to December 2010 ahead of the expiry of the November 2010
contracts on Thursday, 25 November 2010. The market slipped into the red after a firm start as
Chinese stocks fell on rate-hike worries. The market trimmed losses after hitting a fresh intraday low
in morning trade. The key benchmark recovered after hitting fresh intraday lows in mid-morning
trade.

The intraday recovery gathered steam in early afternoon trade as Chinese stocks and US index
futures came off lows. The market lost ground after recouping almost all the earlier intraday losses.
Weakness prevailed in mid-afternoon trade. The market extended losses in late trade.

NSE`s volatility index, India VIX, a gauge of traders` perception of near-term risks in the market
based on options prices, was up 4.75% at 21.60. The index had lost 2.41% to 20.62 on Thursday,
18 November 2010. The index had risen 4.34% to 21.13 on Tuesday, 16 November 2010. The index
had lost 6.38% to 20.25 on Monday, 15 November 2010, a day after Friday`s (12 November 2010)
sharp surge. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a
measure of the market`s expectation of volatility over the next 30 calendar days.

European stock markets were mostly lower on Friday as investors kept a close eye on events in
Ireland, with German equities marking a lone bright spot a day after the DAX hit a new closing high
for 2010. The key benchmark indices in France and UK fell by between 0.2% to 0.6%. But,
Germany`s DAX rose 0.03%.

Investors appeared to be unwilling to hold big positions in stocks ahead of the weekend and any
news on Ireland`s crisis. Initial aid talks between Ireland and a joint European/IMF mission centred
on ways to reduce the size of Irish banks considered too big and reliant on ECB funding, The Irish
Times said on Friday without citing sources. European Commission, European Central Bank and
International Monetary Fund officials arrived in Dublin on Thursday and Ireland`s central bank chief
said he expected Dublin to receive tens of billions of euros in loans. Irish Finance Minister Brian
Lenihan also said on Thursday that Ireland will clearly need some form of external assistance to
address the problems in its banking sector.

Chinese stocks recovered from initial losses triggered by reports Beijing might raise interest rates as
early as Friday, 19 November 2010, to cool inflation. The Shanghai Composite index was up 0.81%.
Hong Kong`s Hang Seng Index bounced more than 300 points from the day`s low point and was
trading 0.13% weaker. The key benchmark indices in Indonesia, Japan, South Korea and Taiwan
were up by between 0.27% to 1.28%.

US shares surged on Thursday, 18 November 2010, as a closely watched gauge of US jobless

benefits hit a two-year low last week and factory activity in the country`s Mid-Atlantic region
accelerated in November, suggesting the economy`s recovery was gaining speed. News that Ireland
is closer to accepting financial assistance from the European Union and Great Britain also aided
sentiment. Concerns about Ireland`s mounting debt had dragged down shares in recent days.

Trading in US index futures indicated that the Dow could fall 24 points at the opening bell on Friday,
19 November 2010. US index futures swung between gains and losses.

Closer home, Prime Minister Manmohan Singh has been forced to explain to the Supreme Court his
failure to probe a huge telecoms scam, in a widening scandal. Solicitor general Gopal Subramanium,
representing Singh, will appear before the court by Saturday. Telecoms Minister Andimuthu Raja was
sacked at the weekend over accusations he sold telecoms licenses too cheaply, potentially losing the
state up to $31 billion in revenues, according to a government audit. On Tuesday, the Supreme
Court took the rare step of publicly criticising Singh`s slowness in deciding if Raja could be charged
and investigated.

On the macro front, the wholesale price index rose 8.58% in October 2010, a touch slower than
8.62% increase in September 2010, data released by the government Monday, 15 November 2010,
showed. The annual reading for August 2010 was upwardly revised to 8.82% from 8.5%.

The food price index rose 10.30% while the fuel price index climbed 10.57% in the year to 6
November 2010, government data on Thursday showed. In the prior week, annual food and fuel