The benhmark Bombay Stock Exchange (BSE) 30-share Sensitive Index shed as much as 727 points closing below the 16,000 mark on the last day of current fiscal ended March 31, 2008.  

Apart from negative cues globally, the sentiment on Dalal Street was also hit by reports that the Institute of Chartered Accountants of India (ICAI) has asked companies to disclose losses on a mark-to-market basis incurred due to derivatives trades from current financial year onwards (year ending March 2008).

New accounting norm

This, as a precursor to making a new accounting standard — the AS-30 — mandatory from April 1, 2011. This could impact the fourth quarter March 31, 2008 and fiscal year 2008 (year ending March 31, 2008) bottom line of Indian firms, say market analysts.

European markets, which opened after Indian markets, were weak in early trade. Asian markets, which opened before Indian market, were in red. US stocks dropped on Friday, 28 March 2008, as profit warning from US department store chain J C Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks. The 30-share BSE Sensex plunged 726.85 points or 4.44 per cent at 15,644.44.  The bellwether index opened with a downward gap of 144.63 points at 16,226.66 and slipped 808.14 points to touch day’s low of 15,563.15 in late trade. The broader based S&P CNX Nifty plunged 207.50 points or 4.20 per cebt to closed at 4,734.50.

Selling spree

Sustained selling pressure in blue chips such as capital goods, financial and IT companies led to Sensex dipping below the 16,000 mark again but the consolation was that the market breadth was marginally positive — out of 2,699 stocks traded, as much as 1,364 advanced while 1,291 declined and 44 were unchanged during the day.
Even as Sensex lost 4642.55 points or 22.88 per cent from 20286.99 points on December 31, 2007, in the quarter ended March 2008. All the same, the Sensex gained 2572.34 points or 19.67 per cent in the financial year 2008, when compared from its close of 13072.10 on March 30, 2007.  Similarly, Nifty at NSE lost 1404.10 points or 22.87 per cent from 6,138.60 on December 31, 2007 in the quarter ended March 2008. Nifty rose 912.95 points or gained 23.88 per cent in the financial year 2008, from its close of 3821.55 on 30 March 2007.  Nifty April 2008 futures were at 4715, a discount of 19.50 points as compared to spot closing. The ICAI norm requires companies to provide for all losses, including those that may occur due to trading in derivatives.