Sensex Sheds 3.7%, Rupee to Four-Month Low

Ivaylo
05 Mar, 2007
New York City

The benchmark index opened with a negative bias, following weakness in the world markets. The market continued to decline throughout the trading on heavy selling in all sectors. Ranbaxy, Maruti Udyog led the decliners in a highly volatile session with a very weak market-breadth. Overnight cash rates fell to 18-month lows on Monday and bond yields rose. The rupee dropped the most in almost four months.

[R]8:00AM NY-7:00PM Mumbai Sensex plummets following global sell-off.[/R]
The Sensex on BSE finished 471.09, or 3.66%, lower at 12,415.04. The market-breadth was appalling as there were more than ten decliners for every advancer. For 2,363 stocks that declined, only 220 advanced and 28 were unchanged. Of the 30 stocks in the Sensex, only two advanced, while the rest declined. On NSE, the turnover was Rs 8,550.91 crore, lower than Rs 8,960.58.

Economic news

The rupee declined the most in almost four months as a collapse in global stocks extended to a second week, raising speculation that foreign funds will sell riskier assets including emerging-market shares. The rupee fell 0.6% to Rs 44.5725 against the dollar, the biggest drop since November 13.

Overnight cash rates plunged to 18-month lows on Monday and bond yields advanced after the RBI limited the amount of cash it would absorb in daily market operations and added it would issue market stabilization bonds. From Monday, RBI will absorb a maximum of Rs 30 billion, or $675 million per day at its reverse repurchase auction window.

Trading highlights

Reliance Industries was the most-active stock with a turnover of Rs 234.80 crore followed by Reliance Communications and Apollo Hospitals.

Advancers

Gujarat Ambuja Cements and Grasim Industries were the only two large-cap advancers. Gujarat Ambuja finished 2% higher at Rs 111.9, while Grasim edged 0.2% higher at Rs 2,102.1.

Decliners

Pharmaceutical large-cap Ranbaxy laboratories led the decliners, down 7.6% to Rs 321.1, while cap maker Maruti Udyog declined 6.6% to Rs 779.3, having dipped to a low of Rs 781 earlier.

Other prominent decliners included Dr Reddy’s, down 6.4% to Rs 618.7, Tata Steel declining 5.1% to Rs 420.3, Wipro off 6.3% to Rs 537.2 and L&T shedding 5.5% to Rs 1,383.8.

Index heavy Reliance Industries declined 5.03% to Rs 1,251.15 on a huge 18.50 lakh shares traded on BSE. R Systems International plummeted 17.93% to Rs 133, after the company posted a poor fiscal performance for Q4 ended December 31 2006. Shares of Infosys dropped 4.6% to Rs 2,006.6 and Tata Consultancy slipped 3.8% to Rs 1,162.20.