Sensex Drop of 3.5% Led the Asian Fall

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

Stocks in Mumbai trading fell sharply after traders worried that rising inflation in the U.S. may hurt the global economic growth and limit the future interest rate cuts. Sensex dropped 3.8% or 769 to close at 19,261.35 and led the Asian wide sell-off. Hong Kong, Australia, and Singapore lost more than 3%. Financials, properties, and exporters fell sharply on heavy trading. Nifty, a broader index, fell 4.5% reflecting widespread losses in the market.

[R]8:00AM New York, 6:30PM Mumbai – Nearly 4% decline in Sensex led the Asian market correction on the inflation worries in the U.S.[/R]

The Bombay Stock Exchange benchmark index Sensex fell 3.8% or 769 to 19,261.35 on renewed concerns of rising inflation in the U.S. might make it difficult for the Federal Reserve to make another rate cut.

The 30-share index had moved in a range of 19,177 to 20,032 levels. Heavy selling was noticeable in metals, real estate, and oil and gas stocks.

DLF and NTPC topped the decliners in Sensex index with the stocks sliding over 7.3% each. Tata Steel, HDFC, ONGC, Tata Motors and Hindalco Industries also lost over 5.7 per cent each.

Among the shares on the BSE, 972 advanced, 1,932 stocks retreated, and 23 remained unchanged. Of the 30 index stocks, 29 surged and one fell.

Total turnover on the BSE stood at 9,524 crore rupees and on the NSE was 20,427 crore rupees.

In the broader markets Nifty registered its biggest one-day loss of 4.5% or 270. The 50-share index touched a low of 5,740 levels before closing at 5,777.

Of the NSE-50 stocks, Idea Cellular, Sterlite Industries, SAIL, Nalco, Suzlon and Reliance Petroleum were some of the leading decliners with each losing more than 6%.

Asian markets were subdued on Monday with most of the indices losing over 1.4%. India led the decliners in the region with a loss of 3.8% followed by more than 3% losses in Australia, Singapore, in Taiwan, and Hong Kong.

The India-Sri Lanka: Trade and Investments conference seeking to enhance trade between the two countries opened in India on Monday. The conference which was organised by Observer Research Foundation in conjunction with Confederation of Indian Industries and the Sri Lankan deputy high commission, will also focus on industrial and investment climate and trade related issues.

India and Sri Lanka signed a Free Trade Agreement nine years ago which saw the bilateral trade doubling from $557 million in 1999 to $2.7 billion in 2007.

Of the BSE shares, Reliance Industries declined 3.86% to 2,777.5 rupees, Tata Steel shed 6.2% to 823.85 rupees, Sterlite Industries slid 8.5% to 976.15 rupees on news that the company plans to enter the equipment manufacturing business to profit from the boom in the domestic steel sector.

National Aluminum Company was down 6.9% to 418.50 rupees and Hindalco Industries retreated 5.7% to 200.70 rupees.

Reliance Communications fell 5.6% to 717.80 rupees. The company announced on Monday that it has completed the acquisition of U.S.-based Yipes Holdings that would give the company access to global enterprise data market.

Bharat Heavy Electricals declined 5.3% to 2,425.25 rupees. Bhel announced during the trading hours that it has signed a joint venture agreement with NTPC for establishment of engineering company.

Larsen and Toubro shed 2.2% to 4,082.1 rupees and Suzlon Energy retreated 6.7% 1,828.1 rupees. Tata Motors declined 5.8% to 701.25 rupees on news reports that Ford Motor Company is poised to name the company as preferred bidder for its Jaguar and Land Rover division sale.

ICICI Bank fell 3.3% to 1,167.1 rupees, HDFC Bank retreated 2.9% to 1,678.3 rupees, State Bank of India lost 4% to 2,314.5 rupees on news reports that the bank is planning to buy a bank in Indonesia.

Reliance Energy lost 4.2% to 1,828.95 rupees, NTPC was down 7.3% to 228.6 rupees, Tata Power Company shed 0.4% to 1,295.9 rupees while Power Grid slid 5.6% to 137.55 rupees.

Peninsula Land lost 8.5% to 135.05 rupees, DLF retreated 7.5% to 944.25 rupees, Indiabulls Real Estate shed 8.3% to 679.25 rupees and Unitech traded weaker at 2.7% to 465.35 rupees.

Hindustan Unilever was up 0.8% to 218.6 rupees, HDFC shed 5.9% to 2,877.55 rupees and ONGC was down 5.8% to 1,166.45 rupees.

In Tokyo Nikkei 225 Index added 264.72 or 1.71% to close at 15,249.79, in Hong Kong Hang Seng index closed down 967.06 or 3.51% to 26,596.58, in Australia ASX 200 closed higher by 228.20 or 3.52% to close 6,263.50.

In South Korea Kospi Index decreased 55.23 or 2.91% to close at 1,839.82, Thailand closed down 15.67 or 2.55% to 598.41, and Indonesia edged lower 75.14 or 2.74% to 2,664.92. India lost 769.48 or 3.84% to 19,261.35.