Third in a Row Decline in Sensex

123jump.com Staff
07 Nov, 2007
New York City

Sensex declined for the third day in a row on rising rupee, weak IT sector, and worries related to foreign fund flows. Sensex fell 0.6% to close at 19,289. IT stocks fell for the third day as rupee continued to climb against dollar. Rupee closed at 39.16 against a dollar. Infosys fell 5.8%, Wipro declined 2%, and Satyam fell 4%. Cognizant dropped 20% after reporting revenue rise of 48%. Banks lost ground led by a decline of 5% i HDFC Bank.

[R]10:00AM New York, 7:30PM Mumbai - Sensex stocks retreated as rupee climbed to a record high and IT stocks declined.[/R]

Sensex in Mumbai fell on heavy losses in IT shares. A report by Moody, a credit rating agency indicated that the appreciation of the rupees since the beginning of the fiscal year has hurt exports but helped to contain the import bill.

Software companies are the hardest hit as they derive over 50% of their revenue from exports to the U.S. In the recent weeks, selling in IT shares hit the market as the rupees continued to strengthen unabated.

The rupee rose 10% against major currencies on strong inflows on foreign investment on the stock markets on sharp economic growth that attracted foreign investors including the short term speculators on the Indian bourses. The key index, Sensex touched record highs as a result. On Wednesday, rupee rose to 39.16 against one dollar, record high in sixteen years.

Infosys Technologies lost 5.8% to 1743.85 rupees, Wipro shed 2% to 477.35 rupees, Satyam Computer slid 4% to 434.85 rupees, and TCS fell 0.6% to 998.25 rupees.

The 30-share BSE Sensex declined 0.6% or 110.84 at 19,289.83.and the S&P CNX Nifty lost 0.07% or 4.15 at 5,782.35.

Turnover on the Bombay Stock Exchange stood at 6,837 crore rupees and at 18,280 crore rupees on the National Stock Exchange.

Of the 30 stock Sensex index share, 20 advanced and ten traded lower. Of the BSE stock 1,028 traded higher, 1,674 retreated and 77 stocks remained unchanged.

Eleventh Plan is likely to relax foreign investment criteria in banking, insurance, and financial services industries. Discussion on the draft plan will begin on Thursday. Foreign investors stake is limited to 26% in insurance companies, 51% in FM radio broadcasting, 49% in air transport, asset reconstruction firm and cable network, 26% in print and electronic media and 74% in atomic minerals, private sector banking, telecom and establishment and operation of satellites.

Reliance Industries gained 4% to 2,762.65 rupees on news that it has discovered gas deposits at one of its block in the Krishna Godavari offshore basin. Commercial feasibility plans have not been completed.

Amtek Auto rose 4.2% to 469.85 rupees, Mahindra & Mahindra gained 2.5% to 759.8 rupees, Maruti Suzuki India surged 2.4% to 996.8 rupees while Hero Honda Motors grew 1.8% to 680.1 rupees.

Amtek is set to take over a UK based automotive machineries manufacturer Triplex Ketlon Group for 600 crore rupees.

Reliance Communications slumped 2.5% to 726.75 rupees and Bharti Airtel shed 2% to 900.25 rupees on news that the Department of Telecom will set up of a committee to review the spectrum allocation policy.

HDFC Bank fell 5.2% to 1,617.95 rupees, ICICI Bank retreated 3% to 1,203.8 rupees, and Canara Bank traded weaker at 3.4% to 271.85 rupees. State Bank of India rose 2.66% to 2267.45 rupees, Bharat Heavy Electrical rose 3.6% to 2,821 rupees and Larsen & Toubro fell 0.3% to 4,114.5 rupees.

The company has priced its 400 million-dollar Global Depository Shares offering at $100 per share. Each GDS represents one equity share of the company of nominal value of 2 rupees each. The GDS are proposed to be listed on the Luxembourg Stock Exchange.

ONGC fell 0.9% to 1,289.25 rupees.