The market staged a smart intra-day rebound in second half of the day`s trading session led by recovery in Reliance Industries (RIL). Panic selling in early trade by wary investors kept market depressed in the first half. Fears in the market were that Left parties might withdraw support to the government, which may lead to early election. The market witnessed choppy swings throughout the day. Cement sector was the start sector of the day.
European markets, which opened before Indian market, were mixed. Asian markets which opened before Indian market recovered from early lows.
The Revolutionary Socialist Party (RSP), a part of the Left front, is reportedly pulling out of the United Progressive Alliance (UPA)-Left coordination committee. RSP has been seeking withdrawal of support to the UPA government since the last three years. The party is now planning to to step up pressure on the other Left parties to withdraw their support to the Manmohan Singh government, reports suggest
The 30-share BSE Sensex was down 97.95 points or 0.61% at 15,965.23, as per provisional closing. Sensex lost 77.78 points at day`s high of 15,985.40 hit in mid-afternoon trade. The barometer index opened 211.46 points lower at 15,851.72 and it had slipped further to touch a low of 15,709.51 in mid-morning trade. At the day`s low, the Sensex lost 353.67 points
Among the 30-member Sensex pack, 18 declined while the rest gained.
Select Sensex stocks staged a smart recovery from early lows. Reliance Infrastructure (down 3.72% to Rs 1126.90, off day`s low of Rs 1085), HDFC (down 2.87% to Rs 2458, off day`s low of Rs 2432), Bharat Heavy Electricals (down 2.86% to Rs 1550, off day`s low of Rs 1501.15) and Jaiprakash Associates (down 2.31% to Rs 207, off day`s low of Rs 200.20) recovered.
India`s fourth largest software services exporter Satyam Computer Services shed 3.31% to Rs 501.50 after Upaid Systems said it has filed fresh claims as part of court proceedings against Satyam in a US court, which could raise possible damages beyond the earlier stated $1 billion.
India`s largest private sector engineering company in terms of order book Larsen & Toubro declined 2.44% to Rs 2845. The company said on Monday, 2 June 2008, it is seeking shareholders` approval to transfer its medical equipment and systems business to a subsidiary or to sell it.
Private sector banking shares declined tracking fall in their American Depository Receipt (ADRs) on the New York Stock Exchange yesterday, 2 June 2008. ICICI Bank lost 0.90% to Rs 757.95 after its ADR slumped 6% and HDFC Bank shed 0.40% to Rs 1306 after its ADR fell 5.5%.
Cement shares advanced on reports the government has restored benefits under the duty entitlement pass book (DEPB) scheme on export of cement, with immediate effect. India`s largest cement company in terms of sales ACC advanced 3.50% to Rs 648. The company has reportedly short listed some companies for acquisition. ACC has cash reserves of Rs 1000 crore which it would use for expansion and acquisition, reports suggest.
Prime Minister Manmohan Singh yesterday, 2 June 2008, indicated that the government is left with no option but to hike the fuel prices in the wake of soaring global crude oil prices. However government`s move to hike fuel price will face challenge from Left, and may propel inflation above 10%.
On the other hand, if government does not hike prices, oil marketing companies will go bankrupt, spoiling its report card
Back home, mounting political concern rattled bourses since second half of day`s trading session, wiping-off early gains, yesterday, 2 June 2008. The 30-share BSE Sensex lost 352.39 points or 2.15% to 16,063.18 and the broader based S&P CNX Nifty declined 130.5 points or 2.68% to shut shop at 4,739.60, on that day.
US light crude for July delivery fell 50 cents a barrel to $127.26 today, 3 June 2008, as the start of the hurricane season stirred concerns that oil and natural gas output could be disrupted in the Gulf of Mexico. London Brent crude fell 80 cents to $127.22 a barrel today.
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