CRASH

A session after witnessing a dead cat bounce, Indian frontline indices picked up from where they had left on Monday as marketmen grew increasingly pessimistic about the market outlook amid growing evidence of slowing down global economy. The benchmarks witnessed panic selling in the session and got obliterated by over two percent to around the lowest levels seen in last two years. Largely across the board carnage was seen on Dalal Street as market participants ruthlessly squared off hefty positions from heavyweight stocks a day ahead of November series derivative contract expiry. Sentiments across the globe appeared gloomy as Asian markets exhibited dispiriting trends amid prolonged anxiety over the fate of global economic growth while the European shares too extended their downtrend for a fifth straight session. Investors' confidence got dented on getting the disappointing Chinese preliminary manufacturing PMI data which showed factory activity decelerated at a faster-than-expected pace to 32-month low levels in November while reports of slower than estimated US GDP growth too revived concerns of a global recession. Marketmen also overlooked the IMF's move to beef up its lending instruments and launch a six-month liquidity line, to bolster the flexibility and scope of its emergency programs to aid nations that may face liquidity problems. On the domestic front, Finance Minister Pranab Mukherjee opined that withdrawals by foreign institutional investors led to the market crash. Market sentiments also got hit from reports that government has no plans to reduce the Securities Transaction Tax (STT) charged on equity trades, as collections dipped by around 18% in the first seven months of the 2011-12. Meanwhile, rupee snapped a seven-day declining streak with speculations that RBI intervened to ease access to foreign exchange and sold US dollars. Also, the sugar stocks which rejoiced earlier on reports that the government has allowed sugar exports too got battered by the end of session and settled with huge losses.
Earlier on Dalal Street, the benchmark got off to a sedate opening as sentiments were largely influenced by pessimistic cues from Asian markets and overnight sell-off on Wall Street. The benchmarks failed to show any kind of fervor and kept drifting to lower levels through the morning trades. But the early noon session saw across the board sell-off which led the frontline indices to nearly two year lows but some short covering thereafter ensured that the local bourses eventually settle off the low point of the day. The NSE's 50-share broadly followed index Nifty, got thrashed by over two percent to settle above the crucial 4,700 support level while Bombay Stock Exchange's Sensitive Index Sensex got pounded by over three hundred fifty points and closed below the psychological 15,700 mark. Moreover, the broader markets too got pulverized as they settled with large cuts of close to two percent but outperformed their larger peers. On the BSE sectoral space, market participants booked hefty profits in the Capital Goods counter which got thrashed by a massive three percent, while the Technology and Oil & Gas counters also got butchered by around two and half a percent. On the other hand, the Consumer Durable counter remained the only counter that managed to snap the session in the positive terrain with around half a percent gains.  The markets plummeted on tremendously large volumes of over Rs 2.53 lakh crore while the turnover for NSE F&O segment too remained on the higher side as compared to Tuesday at over 2.40 lakh core as it was the penultimate day of F&O expiry week. The market breadth too remained awfully pessimistic as there were 761 shares on the gaining side against 2054 shares on the losing side while 101 shares remained unchanged.
Finally, the BSE Sensex shaved off 365.45 points or 2.27% to settle at 15,699.97, while the S&P CNX Nifty plummeted by 105.90 points or 2.20% to close 4,706.45.
The BSE Sensex touched a high and a low of 15,969.60 and 15,478.69 respectively. The BSE Mid cap and Small cap index were down by 2.05% and 1.72% respectively.
The only gainer on the Sensex was NTPC up 0.58%. While, Jaiprakash Associate down 5.05%, HDFC Bank down 3.85%, Bharti Airtel down 3.70%, BHEL down 3.58% and Wipro down 3.17% were the major losers on the index.
The only gainer on the BSE sectoral space was Consumer Durables (CD) up 0.49%. While Capital Goods (CG) down 3.04%, TECk down 2.65%, IT down 2.48%, Oil & Gas down 2.41% and Bankex down 2.40% were the major losers on the BSE sectoral space.
Meanwhile, in the wake of recent decline of Indian rupee against American dollar, the ministry of petroleum wants Rs 56,600 crore more in cash subsidy to partially compensate the government owned oil marketing companies for losses they incur on selling fuel below market cost.
G C Chaturvedi, Oil Secretary said that "at the current rates, under-recoveries (revenue loss) of oil marketing companies (OMCs) in the current fiscal is likely to be of the order of Rs 1,30,000 crore."The Oil Ministry wants the share of upstream companies like Oil and Natural Gas Corp (ONGC) to be limited to one-third of this revenue loss, or Rs 43,329 crore. "We would like their share to be one-third. The rest we want the Finance Ministry to bear," Chaturvedi said.
In the first half of the current financial year, the upstream companies ONGC, Oil India and GAIL bore one-third of the Rs 64,900 crore revenue losses on fuel sale. The finance ministry only gave Rs 30,000 crore and rest was borne by oil refiners, Indian Oil, Bharat Petroleum and Hindustan Petroleum. In the first half of 2011-12, the OMCs have suffered revenue loss of Rs 64,900 crore on selling diesel, kerosene and domestic cooking gas below market price.
Presently, OMCs are losing Rs 11.44 per litre on diesel, Rs 26.94 per litre on kerosene sold via the public distribution system (PDS) and Rs 260.50 per 14.2kg LPG cylinder supplied to domestic households for cooking purposes. As a result, the OMCs are incurring a daily revenue loss of around Rs 360 crore on sale of these three petroleum products. If the prices of these products are not revised, then by the end of the 2011-12, OMCs are expected to incur revenue loss of around Rs 130,000 crore.
The S&P CNX Nifty touched a high and low of 4,779.50 and 4,640.95 respectively.
The top gainers on the Nifty were NTPC up 1.00%, RCom up 0.71%, Bajaj Auto up 0.43% and HUL up 0.03%. On the flip side, BPCL down 5.34%, JP Associate down 5.13%, HDFC Bank down 4.52%, IDFC down 4.36% and Ranbaxy down 4.21% were the top losers on the index.
The European markets were trading in red. France's CAC 40 down 0.54%, Britain's FTSE 100 down by 0.58%, and Germany's DAX down by 0.78%.

Asian markets resumed witnessing slaughter after a day halt as provisional reading on manufacturing growth in China showed contraction and weaker-than-expected economic expansion in the US too dampened the sentiments. HSBC China manufacturing gauge has fallen to 48.0 in November from 51.0 last month. Forecasts for the HSBC flash manufacturing Purchasing Managers Index had called for a 50.1. A level above 50 implies expansion while anything below it denotes contraction while, the US economy expanded at a slower than expected pace in the third quarter, evident after the Commerce Department lowered its GDP growth estimates to 2% from earlier estimates of 2.5%.

Hong Kong and China shares declined below their crucial 18,000 and 2,400 mark, dragged down by materials and finance-related stocks as investors rotated selling and took profit in cyclical sectors with risk aversion staying high in global markets.
Japanese markets remained closed for trade on Wednesday on account of Labor Thanksgiving day.