Sensex Closes 1.5% Lower, Recovers from 4% Loss

123jump.com Staff
17 Aug, 2007
New York City

Sensex in India plunged 4% at the opening but managed to recover in the afternoon trading. The volatility in the U.S. market inflicted damages to markets around the world. Sensex closed 1.5% or 216 points lower to 14,141.52. The index for the week lost 6%. Of the 30 stocks in the index 26 declined and rest gained. Software exporters led the declilners. Satyam Computer fell 6%, Infosys and TCS dropped 3%. Wholesale inflation declined to 4.05% for the week ending on August 4th.

[R]10:00AM New York, 7:30PM Mumbai – Sensex in Mumbai trading fell as much as 4% after recovering to close 1.5% lower. U.S. market volatility inflicted damage to the trading in India and across the world.[/R]

Sensex in Mumbai trading fell 1.5% or 216.69 points to 14,141.52 after recovering from a loss of 578 at the opening. The index has lost nearly 6% during the week on global markets volatility emanating from credit market jitters in the U.S. Nifty Index lost 1.7% or 70.55 points to close at 4,108.05.

Daily turnover on the BSE listed stocks increased to 6,482 crore rupees from 5,646 crore rupees and on the National Stock Exchange increased to 15,286.93 crore rupees from 11,719.28 crore rupees.

Of the stocks trading on the Bombay Stock Exchange, 1,833 declined, 888 stocks gained, and 40 remained unchanged. International institutional investors sold stocks worth 2,548.50 crore rupees (or $600 million).

Of the 30 stocks in the index, 26 declined and 4 gained.

Nagarjun Fertilisers soared 17% to 32.20 rupees on the market rumors that Reliance Industries is likely to acquire the company at 45 rupees per share. Reliance and Nagarjun denied the rumors. Siemens India jumped 1.3% to 1,200 rupees after receiving an order to build hot strip rolling mill for Jindal Steel Works.

Software exporters fell led by Satyam Computer Services 6% decline to 439 rupees followed by 3% loss in Infosys to 1,851. Infosys in the morning trading had dropped as low as 8.6% to 1,745. TCS, the largest company in the sector lost 3% to 1,055 in the sell-off. News reports suggest that the company is exploring its option to acquire back-office operation of U.K. based insurance company Prudential with locations in UK and India. In other news Educomp Solutions closed 6% lower to 2,350 rupees on the news that it has acquired 51% of online tutoring company AuthorGEN. The online presentation company is based in Raleigh, North Carolina and Chandigarh.

Metals and mining stocks fell for the second day on the fall in international price of copper and aluminum. Sterlite led the sector with a loss of 7.6% to 516 rupees followed by losses in Tata Steel of 5.5% to 544 rupees, 4.5% to 136 rupees in SAIL, 3.7% to 139 rupees in Hindalco, and 2.7% to 670 rupees in Hindustan Zinc.

Real estate stocks recovered after falling sharply in the last two sessions. Sobha Developers jumped 4.3% to 775 rupees and Unitech increased 3.6% to 483 rupees. But, DLF fell 0.5% to 581 rupees. DLF agreed to pay 1,675 crore rupees for a textile mill complex controlled by DCM Shriram, the record land transaction in the real estate industry.


[R]7:00AM New York, 8:00PM Tokyo-Massive sell-off sends Japan into doldrums, lowest levels in 6 years. Yen continue firming. The Bank of Japan injects 1.2 trillion yen to improve liquidity and stem interest rates increase.]/R]

Japanese shares hit fresh 6-year lows, as exporters, steel and ship building stocks fell relentlessly on firming yen. Early morning gains in financials were wiped off in afternoon trade, as the U.S. mortgage market problems continue causing mayhem in global shares. Japan plummeted 5.42%. Of 225 shares 200 crashed, 23 gained and 2 were unchanged. Of the stocks in the index, 33 shares fell by more 10% while 86 stocks dropped by between 5% and 9.9%. The Topix fell 5.5%.

In Tokyo trading Nikkei 225 plunged 5.42% to 15,273.68, the biggest decline in 6 years. Landslide declines in exporters mostly, underpinned the fall. The yen firmed to 111 against the dollar from 116 earlier in the week. In the morning, the yen had strengthened to 112. Yesterday it fluctuated between 114 and 113 yen per dollar. For the week the yen has gained 4.2%. The Bank of Japan injected 1.2 trillion into the market to ease liquidity and cool heating rates. Yesterday the Bank of Japan added 400 billion into financial system. But rates remained high, failing to fall below the BOJ target rate of 0.5%.

Japan and South Korea financials architects are due to meet early next week in the wake of financial markets volatility that has caused huge losses amongst investors in the region. Over 250 Japanese delegates will also visit several Asia states to discuss bilateral and investment issues. Japan will extend 400 billion-yen concessionary-rate loan to India as development aid.

Of the stocks Nikkei 225, exporters fell heaviest against a rising yen on expectations foreign earnings will crumble. Sumitomo Met min led losses crashing 16.4% followed by Mitsui ENG Shipb down 15.68%. Hitachi Zosen sank 14.68% while Japan Steelwork lost 13.9% and NGK Insulators falling 13.6%. Carmakers Toyota and Honda fell sharply too. Financials faltered to deceive having regained some lost ground in early morning trade. Most ended in the negative at close. Mitsubishi UFJ F shed 4.5%. At least 13 shares gained by between 1% and 4% while 10 increased below 1%. KDDI led up 3.7% followed by Nippon Paper GRO up 2.82% while Credit Saison inched higher 2.7%. East Japan Rail added 2.7%.

Mitsukoshi Ltd and Isetan Co. are in merger talks to be settled in the ratio 0.3 to 1, according to Nikkei Net Interactive. Isetan Co rose 0.34% in Tokyo.