Indian Stocks Drop 10% from Peak

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

Stocks in India sharply declined on weak tradig in the region, worries related to U.S. economic slow-down, and talks of new taxation on the capital gains in India. Sensex in Mumbai fell 3.5% or 678.18 to close at 18,602.60, third decline this week. Index has now lost nearly 10% in last ten days of trading. Metals, IT, and banks fell. ICICI bank fell 5.5%, HDFC declined 3%, and NTPC lost 8%.

[R]1:30PM New York, 11:00PM Mumbai - Sensex fell for the third day in a row.[/R]

The Sensex in Mumbai dropped 3.5% or 678.18 to close at 18,602.60, third biggest fall this week on heavy selling of stocks in metal and capital goods sector. Banking and IT shares fell sharply.

NTPC, Bharat Heavy Electricals, ITC, and Reliance Energy led the decliners in the index.

A record high crude oil prices nearing $100 a barrel and a weak global markets sentiment affected trading in India.

Local news reports suggested that the government may increase capital gains tax by 5% sparking a sell-off by foreign institutions.
On Tuesday net sales by FII''s amounted 4,201.14 crore rupees while data released by the National Stock Exchange, the FIIs were net sellers of index futures to the tune of 2,897.67 crore rupees and bought index options worth 35.34 crore rupees.

As 614 shares advanced on the BSE, 2,184 retreated while 29 remained unchanged while all index stocks declined. Turnover on the BSE stood at 7,301 crore rupees pushed by revenues recorded by Reliance companies. Turnover on the NSE was

A latest report jointly prepared by PricewaterhouseCoopers, the World Bank and IFC has revealed that India has a better tax system as compared to its neighbor China. In comparison of the two counties, the report said India has lower tax rates and flexible way of payments than the tax payments system in China.

Of the index shares, Reliance Industries fell 2.3% to 2,722 rupees on news that it has signed production sharing agreement for two exploratory blocks 34 and 37 located in the Jeza basin of eastern Yemen. Reliance Industries already has 7 overseas exploratory blocks.

ITC retreated 6% to 184.85 rupees on news that it is preparing for a series of acquisitions to strengthen its food business.

ICICI Bank fell 5.5% to 1,003.1 rupees, HDFC Bank fell 3% to 1,583 rupees while and State Bank of India slid 5.5% to 2,154.65 rupees.

NTPC shed 8% to 239.5 rupees., Tata Power Company lost 4.8% to 1,159.25 rupees, Reliance Energy retreated 5.7% to 1,692.85 rupees while PowerGrid Corporation of India shed 7.7% to 146.9 rupees.

Bharat Heavy Electricals fell 6.3% to 2,486.1 rupees while and Suzlon Energy slid 6.7% to 1,905 rupees. Metal share fell on global metal prices falls. Sterlite Industries shed 7.7% to 885.5 rupees, Hindalco Industries retreated 5% to 184.55 rupees, Steel Authority of India closed lower at 6.9% to 245.45 rupees.

Tata Steel declined 4.4% to 822.rupees on news it is coming out with a mega rights issue of about 10,000 crore rupees as it seeks to repay the ''bridge loans'' raised for funding acquisition of British steel behemoth Corus. Tata Steel UK had raised 3.15 million of debt for financing the acquisition.

The issue will open on November 22. It will include 12.18 crore shares of 300 rupees each to be issued on rights basis in the ratio 1:5 and cumulative compulsory preference shares of 100 rupees to be converted into equity on September 1, 2009.

Wipro slid 2.7% to 436.55 rupees, Satyam Computer was down 1.6% to 412 rupees, Infosys dropped 1% to 1,548.1 rupees while Tata Consultancy Services slumped 1.3% to 948.5 rupees.

DLF declined 4.1% to 870.5 rupees. Indiabulls Real Estate shed 6.9% to 615.3 rupees and Unitech slid 5.5% to 359.35 rupees.

ACC shed 0.5% to 1,079.4 rupees on the news that it had sold surplus assets, including land in Haryana state, for 205 crore rupees. Reliance Natural Resources declined 9.8% to 149.75 rupees.

Reliance Petroleum clocked the highest turnover of 400.9 crore rupees on the BSE. Reliance Natural Resources, Reliance Industries, Reliance Capital and Reliance Energy were other actively traded stocks on the BSE.