After opening higher, indices retreated sharply and closed deep in the red, under performing all the Asian markets. Sensex fell by 261 points to close at 9715, while Nifty shut shop at 2954, down 87 points. Satyam plunged 30% as investors took a negative view on the companys decision of acquiring 51% in Maytas Infra and then calling it off due to strong investor reaction and resultant plunge in its ADR yesterday. U.S. stock futures were trading down by nearly 1.5%.




All the BSE sectoral indices finished in red. Realty and Teck indices were down the most, falling 7.4% and 5% respectively. ICICI Bank and HDFC Bank were the top gainers among the sensex stocks, up 2.4% and 1.8% respectively, while Satyam Computer was the top loser, plunging 30.2%, followed by Reliance Infra, which tumbled 13.7%.
 
Key benchmark indices cut all the losses in afternoon trade to trade in the green for the brief period. The market soon fell in the red thereafter before regaining strength.
 
 
Concerns about lack of transparency and worries about absence of strict corporate governance practices at Indian firms pulled the market sharply down after India's fourth largest software firm in terms of sales, Satyam Computer Services' aborted its decision to buy two related companies. The BSE 30-share Sensex fell 268.76 points, or 2.62%, shedding 364.88 points from the day's high in what was a choppy trading session


Satyam slumped 30.22% to Rs 158.05 on 3.33 crore shares. The stock hit a low of Rs 153.80, a 52 week low for the scrip. Bowing to investor pressure, Satyam called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju. The company made the announcement before trading hours today, 17 December 2008.

Satyam's shares, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from Monday's (15 December 2008) close of $12.30. Investors slammed the move by Satyam to buy Maytas Properties for $1.3 billion and a 51% stake in Maytas Infrastructure for $300 a million, as the acquisition could have wiped out its entire nearly $1.2 billion cash pile.

The company's total disregard for corporate governance and shareholders was shocking - Satyam had no plan to take the proposal to minority shareholders.

Fall in Lower European markets and lower US index futures also weighed on the domestic bourses which tumbled in late trade.

Volatility was high as the market was caught between a steep rate by the US Federal Reserve and concerns over corporate governance standards at Indian firms. After an early surge triggered by the Fed decision, the market had weakened shortly.

A strong rebound saw the market moving into green in early afternoon trade. It later slipped into the red again. After moving between positive and negative zone, the market weakened in mid-afternoon trade. It extended losses in late trade.

European shares gave up early gains to turn negative on Wednesday, 17 December 2008, after France's biggest bank by market capitalisation BNP Paribas said its investment bank unit had a loss for the first 11 months of the year. The key benchmark indices in France, Germany and UK were down by between 0.85% to 1.09%.

Trading in US futures indicated the Dow could fall 158 points at the opening bell. The US Federal Reserve on Tuesday, 16 December 2008, slashed its key interest rate to a target rate of zero to 0.25% from 1%, paving the way for other policymakers around the world to take more aggressive actions to support growth.

The Sensex rose 96.12 points at the day's high of 10,073.10 hit in early trade.

The S&P CNX Nifty was down 87 points, or 2.87%, to 2,954.35

The BSE index fell 2.62% , down 268 points to 9715.29

The market breadth tuned negative during the course of the day from strong breadth earlier in the day. On BSE, 951 shares rose as compared with 1,569 that declined. 76 shares remained unchanged.

The BSE clocked a turnover of Rs 4,882 crore, higher than Rs 4,149.73 crore on Tuesday 16 December 2008.

Tata Power Company, Jaiprakash Associates, Sterlite Industries and Tata Steel fell by between 4.45% to 12.91%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 3.53% to Rs 1,337.80 on profit taking after a recent solid surge. From the recent low of Rs 1,118.60 on 5 December 2008 the stock had jumped 10.68% to Rs 1,238.15 on 16 December 2008.

India's largest oil exploration firm by revenue ONGC rose 1.3% as crude oil prices advanced on expectations the oil cartel the Organisation of Petroleum Exporting Countries (OPEC), will cut supplies further at an official meeting in Algeria today, 17 December 2008.

Oil prices rose for the first time in four days on Wednesday, 17 December 2008, as a global stock rally continued after the US Federal Reserve cut its benchmark interest rate to a record low and pledged to do more to revive the world's biggest economy. Crude oil for January 2009 delivery climbed as much as 90 cents to $44.50 a barrel.

Real estate stocks slipped on reports recent rate cuts on housing loan and extra spending announced by the government on 7 December 2008 are not enough to spur demand. DLF, Indiabulls Real Estate and Unitech fell by between 9.07% to 13.91%. State-run banks on 15 December 2008, announced lower interest rates on small home loans.

While Satyam tumbled, other IT stocks rose boosted by the steep Fed rate cut and as funds reshuffled portfolio. India's second largest IT exporter by sales Infosys rose 1.51% to Rs 1,139.80. India's fourth largest IT exporter by sales Wipro rose 1.5% to Rs 243. India's largest IT exporter by sales Tata Consultancy Services fell 0.76% to Rs 477.10 off the day's high of Rs 494.

Investors dumped Satyam and used the funds to buy other IT pivotals in a bid to stick to their exposure to the Indian IT sector.

Accentia Technologies rose 4.53% after it secured an order worth $ 22 million to service a chain of hospitals in the US.

The aggressive Fed cut also helped IT stocks shrug off a firmer rupee. Indian IT firms derive a lion's share of revenue from exports to the US. The Indian rupee traded close to one-month highs in afternoon trade on Wednesday, buoyed by the Fed rate cut and broad weakness in the dollar against other major currencies overseas. The partially convertible rupee was at 47.32/35 per dollar, stronger than its previous close of 47.92/93. It touched a high of 47.22, the highest since 10 November 2008.A stronger rupee affects IT firms negatively as they earn most of their revenues from exports.

Banking shares gained on hopes lower interest rates will boost lending growth. India's second largest private sector bank by net profit HDFC Bank rose 1.83% as its American depository receipt (ADR) gained 11.63% on Tuesday 16 December 2008. Its advance tax payment fell 10.7% to Rs 250 crore in Q3 December 2008 over Q3 December 2007. India's largest private sector bank by net profit ICICI Bank rose 2.43% as its ADR rose 11.07% on Tuesday. Its advance tax payment declined 6% to Rs 470 crore in Q3 December 2008 over Q3 December 2007.

India's largest commercial bank State Bank of India (SBI) fell 2.98% to Rs 1201.25 off day's high of Rs 1,256 even as its advance tax payment rose 56% at Rs 1,700 crore in Q3 December 2008 over Q3 December 2007.

The Reserve Bank of India (RBI) on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

India's largest cement maker by sales ACC fell 9.21% on shutting one of its kilns at Gagal in Himachal Pradesh.

Anil Dhrubai Ambani group shares Reliance Communications, Reliance Infrastructure, Reliance Capital and Reliance Natural Resources fell by between 11.53% to 16.01% on reports the government is seeking details of an alleged misuse of accounts of Reliance Infrastructure and Reliance Natural Resources by some former UBS employees.

Bharat Forge rose 0.59% on reports the company and European power equipment giant Alstom have finalized the site for setting up a manufacturing facility for power equipments.

Gammon Infrastructure Projects rose 1.43% on achieving financial closure of its offshore container terminal project in Mumbai.

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