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Sensex in red despite recovering 300 points from day's low

Posted: 6:5p.m IST, September 15, 2008

Mumbai, Sep 15 (IANS) After panic selling throughout the morning, Indian equity markets witnessed a smart recovery
but still ended in the red Monday.

At the close of trading, the 30-share benchmark sensitive index of the Bombay Stock Exchange, the Sensex, had
recovered by nearly 300 points to end the day at 13,531.27, still down 469.54 points or 3.35 percent from its closing
figure Friday.

Earlier in the day it had fallen by over 750 points or about 5.4 percent.

Sectorally, realty, information technology, technology covering media, telecommunication and technology stocks, and
metals suffered the most.

The early morning panic selling was sparked off not only by the serial blasts in the country's capital New Delhi, but
also the news that the world's fourth largest investment bank Lehman Bros had filed for Chapter 11 bankruptcy.

Lehman Bros filed for bankruptcy under US laws early Monday morning after failing to find a white knight to bail it out
of its problems arising out of defaults on its real estate assets.

The news that another legendary investment bank Merrill Lynch was being acquired by Bank of America Corporation
for a $50 billion (Rs.2 trillion) all-stock transaction also added to investors' woos. Merrill too has been hit by defaults
on its assets.

'It is true the new entity will create a company unrivalled in its breadth of financial services and global reach, but
Merrill will not remain Merrill any more,' said portfolio strategist Manoj Krishnan of Delhi-based Price Investment
Management & Research Services.

'This would certainly depress sentiment,' he said.

At close of trading Monday, the broader based 50-share S&P Nifty index of the National Stock Exchange also
recovered by 88 points to end at 4,072.90, down 155.55 points or 3.68 percent from its last close.

Earlier, it had fallen by 244.25 points or 5.78 percent to breach the 4,000 mark to 3,984.20 points against its previous
close Friday at 4,228.45.

'The recovery was largely due to short covering by bears since there was a clear profit of about 1,000 points after
300-odd points lost Friday and another 700-odd points lost today,' said Jagannadham Thunuguntla, equity head of
Delhi-based NEXGEN Capitals Ltd.

NEXGEN is an arm of India's fourth largest securities brokerage house, SMC Group.

'The recovery was also due to bottom fishing or buying at the bottom by institutional investors,' said Krishnan but
Thunuguntla felt it was too early for bottom fishing.
The recovery spread to mid cap and small cap stocks as well.

The BSE mid cap index ended the day at 5,288.59, down by just 248.55 points or 4.49 percent.

Earlier in the day it had fallen by 322.75 points or 5.83 percent to 5,214.39.

The BSE small cap index too recovered to end the day at 6,380.47, down 331.07 points or 4.93 percent from its
previous close Friday.

Earlier in the day it had fallen by 374.95 points or 5.59 percent to 6,336.59.

Of the 30 shares in the Sensex, only three stocks recovered enough to end the day in the black.

Maruti Suzuki ended the day at Rs.723.40 up Rs.19.70 or 2.8 percent from its previous closing Friday at Rs.703.70.

Housing Development Finance Company (HDFC) gained Rs.25.35 or 1.16 percent to end the day at Rs.2,204.45.

Cement major ACC Ltd, the last of the three gainers ended the day at Rs.594.15 up Rs.3.60 or 0.61 percent from its
previous close Friday of Rs.590.55.

As many as 20 stocks included in the Sensex declined, led by Reliance Infrastructure which fell by Rs.90.35 or 9.72
percent to Rs.838.95 from its previous close of Rs.929.30.

The other three top losers were Satyam Computers, Ranbaxy Laboratories and DLF Ltd.

Satyam fell Rs.38.40 or 9.45 percent to Rs.368.15 against its previous close of Rs.406.55.

Ranbaxy shed Rs.34.50 or 7.6 percent to Rs.419.45 against its previous close of Rs.453.95.

DLF Ltd fell by Rs.35.30 or 7.54 percent to Rs.432.60 against its previous close of Rs.467.90.

On the whole, the sentiment was negative. As many as 2,263 scrips declined during the day while only 359 advanced
and 40 remained unchanged.