As we predicted, a fresh downturn may have started

The market recovered from its early low, taking a cue from European markets. The Sensex ended at 16,835, lower by 159 points (1%) while the Nifty shut at 5,060, down by 33 points (0.6%). Bourses plunged sharply in the early morning session on the back of weak Asian markets. The market traded range-bound till mid-morning when it touched an intraday low of 16,551. It staged a solid recovery in the afternoon session paring most of the early session’s loss.

Asian markets were down on Monday on concerns over the economic recovery of the eurozone and weak US earnings data, dampening investors’ appetite for risk. Key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by 0.77% to 5.07%.

US stocks were down on Friday (14th May) on weak earnings from retailers, Senate backing for limits on credit card fees and concerns over the sustainability of European public debt. The Dow was down 163 points (1.5%) to end at 10,620. The S&P 500 was down 21.76 points (1.8%) to 1,135.6. The Nasdaq was down 47.5 points (1.9%) to close at 2,347.

The World Trade Organisation (WTO) said that the Doha Trade talks should be pushed forward to help countries emerge from the global economic crisis. The International Monetary Fund (IMF) said that some countries should control their expenditure; however, large economies can wait till 2011. 

Gold prices are on a rise as investors, worried by the debt crisis in the eurozone, are taking refuge in the yellow metal. Purchase of gold-backed exchange traded funds has sent the yellow metal to a record high near $1,250 an ounce this month.

Back home, Foreign Institutional Investors (FIIs) were net sellers on Friday, offloading stocks worth Rs381 crore. Domestic Institutional Investors (DIIs) were net buyers of Rs164 crore. The rupee was down on the weak equity market and strengthening of the dollar against the euro.

Larsen & Toubro (L&T) (up 5%) has posted growth of 28% and 31% in sales and operating profit in the March quarter over the year-ago period. At the end of the March quarter its order book stood at Rs1 trillion. The board has recommended a dividend of Rs12.50 per share (in the previous year, it was Rs10.50 per share).

Reliance Industries (RIL) (down 2.6%) and SIBUR, Russia’s leading petrochemical company, have signed a memorandum of understanding (MoU) to set up a joint venture in India. This new joint venture will produce butyl rubber at RIL’s integrated petrochemical site at Jamnagar in Gujarat. As per the agreement, SIBUR will provide proprietary technology for butyl rubber polymerisation and its finishing while RIL will supply monomers and provide the JV with world-class infrastructure and utilities.

McNally Bharat Engineering Company (down 4%) has received orders for design, supply, erection and commissioning for a power project in Tripura for a total value of Rs9.91 crore. The scheduled time for completion of this project is 17 months. The second order is for another power project in Tripura for Rs17.27 crore. The scheduled time for completion is 18 months.

KSK Energy Ventures (up 2.4%) has announced the commencement of power generation from the first 135MW unit (out of four such units of 135MW each) of its 540MW coal-fired project in Maharashtra.