10:00AM New York, 7:30PM Mumbai - Banking, technology and auto stocks drags Sensex lower, Inflation increased to 4.35%.

Market Sentiment

Indian market closed weak on Friday after a sell-off in bank and auto stocks on the latest inflation report. Sensex closed 18% lower from the peak reached on Jan 10th.

The 30-share BSE Sensex fell 2.2% or 385.61 to 17,349.07. In the broader markets, Nifty declined 1.5% or 78.25 at 5,113.55.

The market breadth was weak as 27 stocks in the Sensex index declined while the rest gained.

In the BSE trading, 1,759 shares declined, 935 advanced while 93 shares remained unchanged.

New Issues

Despite the market decline Rural Electrification Corporation offering was subscribed 15 times by the end of Friday according to the report on NSE website. The price band for the offering is between 90 rupees to 105 rupees.

Turnover

Daily turnover on BSE amounted to 4,451 crore rupees and on the National Stock Exchange was at 10,201 crore rupees.

Reliance Power was the most active stocks with turnover of 524.25 crore rupees. Reliance Natural Resources, Reliance Capital, OnMobile Global, and Reliance Industries were also among the most active stocks.

Economic News

Annualized inflation based on the wholesale price index increased 4.35% for the week ended 9 February 9, 2008 from 4.1% in the previous week, according to the data released by the government of Friday.

Market is expecting populist budget presented by the Congress led current coalition government. The budget is scheduled to be released on February 29th and market is hoping that proposed budget deficit will not exceed that from the last fiscal year.

Gainers and Decliners

Bajaj Auto fell 4.8% to 2,295.60 rupees and led the decliners in the Sensex index and Cipla gained 5.4% to 198.60 rupees on 4.24 lakh shares and led the advancers in the Sensex index.

Mahindra & Mahindra declined 2% to 628.60 rupees, Hero Honda Motors lost 1.5% to 719.25 rupees and Tata Motors was down 2% to 694.70 rupees. However, Maruti Suzuki India rose 0.4% to 766.65 rupees.

ICICI Bank lost 3.9% to 1,099 rupees, State Bank of India lost 3.04% to 2,113 rupees and HDFC Bank lost 4.5% to 1,473.9 rupees.

Satyam Computers fell 4.4% to 438.25 rupees, Infosys Technologies declined 3.1% to 1,580.10 rupees, Wipro was down 2.1% to 422.40 rupees and TCS fell 2.4% to 896 rupees.

Hindalco Industries gained 1.4% to 192 rupees.

Reliance Update