Sensex Plunges 5%

123jump.com Staff
13 Mar, 2008
New York City

Indian stocks declined a day after industrial production fell January data and a weak global markets. Sensex plunged 4.8% or 770.63 to close at 15,357.35. The Sensex index is now down 29% from its peak in the first week in January 2008. Record crude oil above $110 lifted worries related to inflation. DLF plunged 13% after the reports that the company may dealy its offering in Singapore. ICICI Bank dropped 5.7% and State Bank of India declined 7%.

[R]10.00AM New York 7.30PM Mumbai – Sensex in Mumbai declined sharply after global markets pulled back and crude oil reached at a record level.[/R]


Market Sentiment

Indian markets tumbled on weak global markets with the benchmark index Sensex declining 4.8% or 770.63, the lowest since August 31 2007.

At close, the 30-BSE share stood at 15,357.35 levels. Of the index shares, 28 stocks gained and 2 stocks declined. Property developer DLF led the losers in the Sensex index.

In broader markets, the National Stock Market Nifty Index fell 5.1% or 242.40, the lowest since September 18 2007. The NSE-50 index closed at 4,623.60 levels.

Markets across the globe dropped amid concerns about the effectiveness of the coordinated move between central banks in Europe, UK, Australia and Canada led by the U.S. Federal Reserve to inject additional liquidity of as much $256 billion into the strained credit markets.

Metals shares were battered. Hindalco Industries, Tata Steel, Steel Authority of India and JSW Steel fell.

Realty share reversed a two-day rally while banking shares tumbled on selling pressure. ICICI Bank dropped tracking weak ADR, which declined 5% on the NYSE on Wednesday.

Technology shares also fell on concerns of a US economic recession.

Of the BSE stocks, 2,331 shares declined, 359 shares advanced while 43 shares remained unchanged.

Turnover

Daily turnover on the BSE stood at 5,952 crore rupees and on the National Stock Exchange was at 13,603 crore rupees.

Reliance Industries was most active stock on the BSE with a turnover of 282.97 crore rupees followed by Reliance Natural Resources, Housing Development & Infrastructure, Reliance Petroleum and Rural Electrification Corporation.

Market News

Growing interest of investors beyond the equities has catapulted the National Stock Exchange of India on the list of the world''s top 10 derivative bourses, with the fastest trading volume growth.

According to an annual report on global derivatives trading volumes released by U.S. based trade group, Future Industry Association, NSE has moved up 6 places to the world''s 9th largest derivative exchange.

NSE, according to FIA registered a growth of 95.32% F&O volume in 2007 to close to 380 million against 194 million in 2006.

Gainers and Decliners

DLF fell 13.2% to 618 rupees and led the decliners in the Sensex index on news reports that the company may delay a planned initial public offering to raise $1.5 billion from a real estate investment trust in Singapore.

Unitech declined 9.6% to 266.20 rupees, Parsvnath Developers lost 8.5% to 207 rupees and Indiabulls Real Estate plunged 10.2% to 510 rupees.

Metal shares declined. Hindalco Industries declined 9.7% 173.15 rupees, Tata Steel dropped 9.1% to 697 rupees and Steel Authority of India fell 11.6% to 192.80 rupees.

ICICI Bank declined 5.7% to 830 rupees and State Bank of India declined 6.8% to 1,685 rupees.

Bajaj Auto gained 1.5% to 2,124 rupees. All existing futures & options contracts on the stock expired today and new contracts will be introduced on, March 14 2008, after the company splits according to a court ruling.

As per the demerger scheme, the company''s various business units including auto manufacturing and other strategic businesses including wind energy, insurance and financial services, would be demerged into two newly incorporated subsidiaries Bajaj Holdings and Investments and Bajaj Finserv.

TCS dropped 7.3% to 765 rupees, Satyam Computers dropped 5.1% to 359.90 rupees and Wipro fell 6.8% to 363.55 rupees.

Bharat Heavy Electricals plunged 6.5% to 1,885 rupees.

Reliance Update

Reliance Industries declined 5.2% to 2,252 rupees and Reliance Capital declined 13.3% to 1,250 rupees.

Reliance Energy was down 11% to 1,183 rupees and Reliance Communications fell 7.8% to 497.50 rupees.

Corporate News

Bharti Airtel Lanka, a subsidiary of Indian telecom giant Bharti Airtel has signed a $100 million investment agreement with the Board of Investment of Sri Lanka to begin Lankan operation by this year.

The agreement is the second phase of the company''s commitment to invest $200 million in Sri Lanka over the next 5 years.

With mobile penetration in Sri Lanka estimated at around 30% growing at annual rate of 2 million mobile subscribers, Bharti hopes to expand its market share in five years.