India Market Wrap

* INDICES: Sensex -283 at 18145 (-1.54%), NIFTY -102 at 5505 (-1.82%), CNXMIDCAP -304 at 7677 (-3.81%)

* SECTORAL PERFORMANCE: BANKEX -3.82%, AUTO -1.55%, CAPITAL GOODS -2.35%, HEALTHCARE -0.8%, Metal -4.29%, OIL & GAS -0.78%, IT -0.62%, FMCG -0.58%, PSU -2.71%, REALTY -6.77%, Consumer Durables -4.93%, POWER -3.75%

* MARKET BREADTH: 59 Advances, 440 Declines (BSE 500)

* VOLUMES: BSE $0.77bn (9.62%), NSE $3.75bn (16.59%), F&O $45.54bn (46.31%)

* TODAY'S GAINERS: BPCL 1.57%, TCS 1.24%, SUNP 1.08%, ITC 0.55%, INFO 0.48%

* TODAY'S LOSERS: RCOM -8.71%, SBIN -8.05%, DLFU -7.72%, STLT -6.82%, JPA -5.77%

MARKET COMMENTARY:

The much-dreaded correction in the Indian market has finally materialized as expected bout of volatility was witnessed as key benchmark indices slumping to hit it to fresh intraday lows after moving into positive zone for a brief period in mid-afternoon trade. The market pared gains after hitting 30-week high at the onset of the trading session. Traders rolled positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. Tracking cues from the global markets there was a sudden and sharp fall in European indices erasing early gains after the economic data the released were disappointing on manufacturing and services PMI. Private-sector activity across the 17-nation eurozone contracted unexpectedly in February, according to a preliminary Market purchasing managers index (PMI) for the region. Coming back home India's economy is also expected to grow an annual 7.1% in the current financial year that ends in March, and 7.5 to 8% in the next financial year as report presented by C. Rangarajan, chairman of Prime Minister Manmohan Singh's economic advisory council said. He also added that Indian economy has lost momentum as euro zone debt woes coupled with high interest rates and policy paralysis at home have hit capital investment and its likely to overshoot in fiscal deficit over the budgeted 4.6% of gross domestic product is a matter of concern and the government must lay out a roadmap for fiscal consolidation. Meanwhile, the Multi Commodity Exchange (MCX) on Tuesday, 21 February 2012, raised Rs 95.62 crore from 12 anchor investors. MCX's initial public offer (IPO) opened for bidding today and will close on Friday, 24 February 2012.

NEWS ON TODAYS MOVERS:

Ø State Bank of India slipped nearly 8.05% on reports the bank extended a Rs 1200 crore relief package to cash-strapped Kingfisher Airlines.

Ø Reliance Industries lost ground by nearly 1.20% after the company announced a $450-million joint venture with Russian petrochemical company SIBUR for setting up a one-lakh tonne butyl rubber plant at the Indian firm's Jamnagar refinery.

Ø Bank of India collapsed 7.92% after the bank said its board of directors approved raising of capital by issue of up to 7 crore fresh equity shares on preferential basis.

Ø Cairn India declined nearly 1.47% on profit taking despite of crude oil futures surged $2.65 a barrel to settle at $106.25 on New York Mercantile Exchange on Tuesday, 21 February 2012.

Ø Sun Pharmaceutical Industries rose nearly 1.08% after the US drug regulator reached a limited, temporary arrangement to import Lipodox from the company and its distribution subsidiary, Caraco Pharmaceutical Laboratories.

Ø Lanco Infratech tumbled 16.49% on profit booking after the stock jumped 45.65% in the preceding five trading sessions to Rs 23.45 on 21 February 2012 from Rs 16.10 on 13 February 2012.

Ø Banking Shares lost ground nearly 5.19% on an average on back of profit taking after recent strong gains.

Ø ONGC traded in positive terrain with small gains of 0.27% , extending recent gains on reports the government is likely to consider disinvestment in the company on Friday, 24 February 2012.

Ø DCB slips over 1.61%, after the bank said its board of directors approved raising of capital by issue of up to 7 crore fresh equity shares on preferential basis

Ø HCL Technologies traded flat for the day despite company saying it has won ICD 10 transformation deal with Blue Shield of California.

CORPORATE NEWS:

Ø Jubilant Life arm secures contract worth $90 mn

Ø Sesa Goa to merge with Sterlite Industries.

Ø IL&FS Invesment to buy 51% stake in JV Godrej Hershey

Ø Telenor looks to form new company, dumps Unitech

Ø REC to raise Rs3K cr via tax-free bonds

Ø SBI comes to help troubled KFA

Ø BoI to issue 70 mn equity shares to govt of India, LIC

Ø RIL finalises rubber JV with Russian Co

Ø MCX raises $19.4 mn in pre-IPO share sale

Ø M&M to roll out own utility vehicle range in Russia

Ø Fare hike not due to KFA flight cancellation: DGCA

ECONOMIC NEWS:

Ø Deposits in foreign banks may attract wealth tax

Ø RBI to mull CRR cut: Subir Gokarn

Ø RBI looks for strong policies in Budget to check deficit

Ø India’s GDP to grow at 7.1% in FY12: Rangarajan