Sensex Drops 5% in the Week

123jump.com Staff
19 Oct, 2007
New York City

Stocks in Mumbai trading fell for the fourth day in a row. CNX Nifty dropped 2.5% and Sensex lost 2.45% on the broad weakness but on a strong volume. International investors with short term tradig focus remained nervous. SEBI may allow longer time period to unwind investment in participatory notes. Earnings at Bajaj Auto increased 6%, at Wipro gained 13.5%, and at Reliance Industries soared 28%.

[R]10:00AM New York, 7:30PM Mumbai - Sensex fell for the fourth day in a row. Inflation touched 5 year low.[/R]

Sensex traded weaker on continued worries on the proposal by the Securities & Exchange Board of India to limit anonymous trading conducted in the derivative market by international hedge funds through participatory notes.

The market plunged on Tuesday after the announcement and never recovered during the remaining trading days of the week.

The proposed plan will limit the exposure through derivative contracts and will require at least 40% collateral in the margin account. The owners of participatory notes will have eighteen months to transfer the securities held through derivative contract in their name and register with the regulator.

Finance minister P Chidambaram said today that SEBI may extend the eighteen months time to unwind investment in participatory notes.

Nifty CNX Index lost 2.5% or 135.7 at 5.215.3 and Sensex 30 index on Bombay Stock Exchange dropped 2.44% or 438.4 at 17,559.98. The total trading turnover on BSE amounted to 9,611 crore rupees and on the National Stock Exchange was 21,445 crore rupees.

Of the Sensex index 30 stocks, 21 declined and none gained or were unchanged. Of the stocks traded on the Bombay Stock Exchange 2,160 declined, 544 advanced, and 35 were unchanged.

Inflation touched five-year low of 3.07% for the week ended October 6th, on a decline in food prices and light manufactured goods. The wholesale price index was at 5.36% in the same period last year.

Of the Sensex stocks, Reliance Energy led the losers. It dropped 16.3% to 1,332 rupees on 42.74 lakh shares. Hindalco Industries shed 6.4% to 175 rupees, Maruti Suzuki India slid 6.8% to 1,071 rupees and Bharat Heavy Electricals retreated 5.7% to 2,059 rupees.

Reliance Industries lost 3.7% to 2,480 rupees. The company reported second quarter earnings rise of 27.9% on Thursday and said that exports reached $9 billion at the end of the first half.

Reliance Communications surged 2.5% to 729.5 rupees on 71.86 lakh shares. It led the advancers of 30 stocks in the Sensex. Reliance Communication said before market hours it has obtained government approval to launch GSM services on a nationwide basis under its existing Unified Access Service Licenses.

Bajaj Auto rose 2.4% to 2,519.9 rupees. Bajaj earnings rose to 336 crore rupees in the second quarter at the end of September 2007, 6% increase compared to a year ago.

Tata Steel surged 1.7% to 850.10 rupees, Infosys gained 0.9% to 1,905.

Wipro gained 0.8% to 500 rupees. Wipro''s consolidated earnings under Indian accounting rose 13.5% to 823.7 crore rupees on 13.1% rise in revenue to 4,757.4 crore rupees in second quarter of 2007 from the first quarter.

United Spirits was the most active stocks in BSE trading with total turnover of 782.30 crore rupees after 44.71 lakh shares changed hands. Reliance Energy, Reliance Industries, HDFC and Reliance Communications were other stocks on the most active list.