Shares slide on oil shock

52-Wk high 4-Jun-08 % Fall Realty13,848.096,389.2053.86 Power4,929.342,632.3746.60 Bankex12,678.967,210.3743.13 Consumer durables7,119.694,089.7142.56 Capital goods21,020.9712,115.8242.36 Oil & Gas14,268.8910,059.5129.50 Auto5,881.634,225.5928.16 S&P CNX Nifty6,357.104,585.6027.87 Sensex21,206.7715,514.7926.84 Metal20,494.6215,423.1524.75  The outlook is also bearish. Mihir Vora, head of Equities at HSBC Mutual Fund, said Vora said in the short term, global investors will prefer strong commodity markets like Brazil and Russia rather than India and China.  Vora said he expects markets to remain volatile for the next few months as global and local factors are still creating headwinds. Global concerns of inflation and slowdown along with local concerns of inflation coupled with twin deficits on the fiscal and trade account are creating pressure on the currency and interest rates. This may impact growth.  Oil, automobile and real estate stocks led the fall on Wednesday. Sudip Bandyopadhyay, chief executive officer of Reliance Money, said there was no point in artificially suppressing inflation.  The move to hike fuel prices was long overdue as the oil companies were dying after the huge rally in global crude prices.  But the economic logic was hardly of any comfort to market players. Among the oil companies, only ONGC reacted positively to the fuel price hike announcement on speculation that it may have to now absorb a lower subsidy burden. The stock was up by 5.31 per cent at Rs 887.  Bharat Petroleum Corporation was the top loser among public sector refineries. The stock fell 7.84 per cent to Rs 324. The share price of Indian Oil and Hindustan Petroleum Corporation fell in the range of 2-4 per cent.  The BSE Oil&Gas index slumped 3.39 per cent.  Among private refiners, Reliance Industries was down 4.14 per cent at Rs 2,307. As per the provisional figures available on BSE, foreign institutional investors (FIIs) were net sellers to the tune of Rs 1,198.80 crore on Wednesday. Domestic fund houses made purchases worth Rs 419 crore.  Auto and metal counters too bore the brunt of hike. Analysts anticipate higher petrol price to hamper demand for vehicles, which in turn would dampen steel demand too, which is a key input for the auto industry.  Tata Steel was down 5.36 per cent at Rs 815 and Hindalco Industries slipped 3.09 per cent at Rs 178. Among the auto majors Mauti Suzuki fell by 5.07 per cent at Rs 746.  Tata Motors slipped 4.87 per cent at Rs 542 and Mahindra & Mahindra Ltd declined 3.88 per cent at Rs 568.  The market breadth remained poor as 72.34 per cent or 1,967 stocks declined against the advances of mere 24.86 per cent or 676 stocks on BSE.  The US markets had registered a decline on June 3, 2008 led by growing speculation that Lehman Brothers would be forced to raise additional capital. Aslo, the softening in crude oil prices pushed down energy company stocks.  The Dow Jones industrial Average declined 0.81 per cent. The S&P 500 index slipped 0.58 per cent and Nasdaq Composite index was down 0.44 per cent.  The major Asian indices closed on a mixed note on Wednesday. Nikkei and Taiwan Weighted rose between 0.56-1.59 per cent. Straits Times, Hang Seng and Shanghai Composite were down between 0.83-1.93 per cent.