Global Markets Drag Sensex Down 2.8%

123jump.com Staff
06 Feb, 2008
New York City

Mumbai stocks are caught in a volatile and choppy trading for the last three months, and trading today was no different. Sensex index fell 2.8% or 523 to 18,139.49 in line with global market sell-off. U.S. market averages fell between 2.5% and 3% and markets in Europe decline more than 2%. European markets todaly eked out minor gains after a mild rebound in the U.S. Maruti Suzuki, Tata Motors, and Bajaj Auto fell.

[R]10:00AM New York, 7:30PM Mumbai – Sensex trading remains in grip of global markets events and fell in line with others markets around the world.[/R]

Market Sentiment

Indian markets on Wednesday continued to reel under heavy selling pressure in the afternoon session with the benchmark index shedding 2.8% or 523.67 at 18,139.49.

In the broader markets, Nifty shed 2.9% or 161.35 at 5,322.55.

Of the BSE shares, 1,298 advanced, 1,484 stocks declined, and 31 stocks remained unchanged. Among the Sensex index shares, 28 slumped while 2 advanced.

IT share declined for a second day in a row due to a gloomy economic outlook in the United States. Satyam Computer, Infosys Technologies and Wipro were the leading the decliners in the sector.

Key decliners in the Sensex index included Bharti Airtel, TCS, Hindalco, Tata Motors, Maruti Suzuki India, ONGC, DLF Limited, Ranbaxy, NTPC, Tata Steel, Reliance Industries and ICICI.

Daily turnover on the BSE stood at 6,289 crore rupees while daily revenue on the National Stock Exchange was at 13,927 crore rupees.

Reliance Natural Resources was the most active stock on the BSE. It recorded a turnover of 469 crore rupees. Nagarjuna Fertiliser and Chemicals, IFCI and Tata Teleservices were also on the active list.

Economic News

Indian economy will attract more global investments benefiting from the US slowdown but the country should not get psyched by the bubble burst there, Commerce and Industry Minister Kamal Nath said on Wednesday.

Earlier, the US was the most attractive investment destination for funds from the Middle East and Russia and ""India is becoming an important parking lot for investments,"" Nath added.

Gainers and Losers

Satyam Computer Services shed 6.7% to 408.65 rupees, Wipro lost 6.5% to 425 rupees, Infosys slid 6.3% to 1,510.60 while Tata Consultancy Services slumped 5.2% to 900.55 rupees.

Metal stocks declined. Sterlite Industries lost 5.8% to 788.05 rupees, National Aluminum Company shed 5.8% to 390.05 rupees, Hindalco Industries was down 4.9% to 173.05 rupees and Steel Authority of India closed weak at 4.9% to 221.15 rupees.

Maruti Suzuki India dropped 4.8% to 30.25, Tata Motors fell 2.6% to 736.25 rupees, Bajaj Auto shed 2.7% to 2,339.45 rupees and Mahindra & Mahindra lost 2.4% to 664.05 rupees.

ICICI Bank fell 3.1% to 1,152.85 rupees. Larsen & Toubro fell 1.9% to 3,780.60 rupees.

Reliance Update

Reliance Industries fell 2.4% at 2,552.05 rupees on the reports that two oil wells in D6 block in the Krishna Godavari basin have run into technical difficulties. The losses from the technical problems are estimated at $175 million but will not delay production of natural gas from the D6 block.

Reliance Energy rose to 2,056.35. Reliance Communications rose 0.7% to 681.6 rupees. Reliance Communications is reportedly set to test-launch its Direct-to-Home services called Big TV this week, before a full commercial launch in March this year.

According to reports, the company is investing $250 million in the first phase for the launch and has placed order for over 2 million set-top boxes.

International Markets

U.S. stocks closed sharply lower on Tuesday with Dow Jones Industrial Average, Nasdaq index, and S&P 500 falling between 2.5% and 3%. Market averages fell after January service sector index showed a decline in service industry, contrary to what most economists had hoped.

In Tokyo Nikkei 225 Index closed lower 646.26 or 4.70% to 13,099.24, in Hong Kong Hang Seng index decreased 1339.24 or 5.40% closed to 23,469.46, in Australia ASX 200 index lower 183.50 or 3.17% to close 5,609.40.

Thailand SET index closed lower 13.05 or 1.62% to 794.63, and Indonesia JSE Index edged decreased 65.16 or 2.41% to 2,639.09. Sensex index in India decreased 523.70 or 2.81% to 18,139.49. Market of South Korea was closed today.

In London FTSE 100 Index closed higher 7.40 or 0.13% to 5,875.40, in Paris CAC 40 Index increased 39.57 or 0.83% to close at 4,816.43 and in Frankfurt DAX index higher 82.26 or 1.22% to close at 6,847.51. In Zurich trading SMI increased 48.04 or 0.64% to close at 7,565.45.