Sensex Drops 1.2%

123jump.com Staff
10 Jun, 2008
New York City

Stocks in Mumbai trading fell 1.2% after inflation worries dominated trading. Sensex dropped 1.2% and has lost 6% in the last five sessions. Rising crude oil prices and jittery investors in the U.S. and Europe have sold nearly $300 million of stocks in India in the last two weeks. The Sensex index now is at a three month low. Rising crude oil and food prices are stocking inflation. BHEL, the engineering company won an order to build a power plant in New Delhi.

[R]10:00AM New York, 7:30PM Mumbai – Sensex lost 1.2% and declined nearly 6% in the last five sessions.[/R]

Indian market highlights

Indian shares fell for the third day in a row on the worries on rising crude worries and weak global financial markets weighed in the domestic trading.

At Tuesday close, the 30-share BSE Sensex declined 1.2% or 176.85 at 14,889.25, its lowest close since mid-March 2008. On the NSE, the broader based S&P CNX Nifty fell 1.1% or 41.25 points at 4,449.80.

Of the BSE traded shares, 964 shares gained, 1,667 fell and 68 remained unchanged. Among the 30 stocks from Sensex, 21 shares declined while 9 shares remained unchanged.

Trading statistics

Daily turnover on the BSE stood at 5,265 crore rupees and on the NSE at 13,798 crore rupees.

IFCI was the most active on trading volume of 1.85 crore shares on BSE followed Reliance Petroleum, Ispat Industries, Reliance Natural Resources and Spice Communications.

Reliance Industries was the most active stock on trading value on the BSE with the trading turnover of 281.98 crore rupees followed by Reliance Capital, Reliance Petroleum, Ranbaxy Laboratories and Anu''s Laboratories.

Chidambaram reiterates economy to expand at 8.5%

Finance minister P. Chidambaram said economy will expand by 8.5% in the fiscal year ending March 2009 despite concerns of high crude oil prices.

Asia''s third-largest economy is estimated to have grown 9% in the fiscal year ended March 2008, and has grown at an average 8.8% during the past four years.

Government and the Reserve bank of India have predicted expansion between 8% and 8.5% in the current fiscal year. But, high global oil prices and rising inflation above 8% may moderate growth.

Chidambaram also said the government''s target for direct tax receipts for the current fiscal would be raised from the current 3.65 trillion rupees

Iran sees crude oil price rising to $150

The price of crude oil may rise to $150 a barrel by the end of summer, Iran''s representative to the OPEC oil cartel warned today.

Mohammad Ali Khatibi comment came after New York''s main oil futures contract, light sweet crude for July delivery, on Friday leapt $10.75 a barrel, record one-day increase, to close at a record $138.54.

The rise was fueled on a threat of strike from Israeli minister about a possible military strike on Iran.

BHEL on Tuesday announced that it has won 3,588-crore rupees turnkey order to set up a combined cycle power plant at Bawana in New Delhi. Combined cycle power plant produces electricity and recycles steam to lower cost of power production. In a statement, the company said the order was placed by Pragati Power Corporation Ltd and also involves supply and commissioning of four gas turbines for Pragati.

Gainers and losers

Bharat Heavy Electricals gained 0.5% to 1,382.05 rupees. Tata Motors fell 0.8% to 512.90 rupees.

ONGC declined 4.7% to 831.25 rupees, HDFC fell 4.8% to 2,101 rupees and Jaiprakash Associates was down 3.5% to 177.15 rupees.

Banking stocks fell extending their recent sharp losses on concerns of further policy tightening of the monetary policy by the Reserve Bank of India to rein in four year high record inflation.

HDFC Bank dropped 5% to 1,130.95 rupees, State Bank of India declined 1.1% to 1,279.10 rupees and ICICI Bank declined 2.5% to 731.60 rupees.

Realty stocks extended yesterday''s losses. Indiabulls Real Estate fell 1.8% to 391.15 rupees, Unitech declined 3% to 179.20 rupees and DLF fell 0.4% to 479.85 rupees.

Software services companies, which get more than half their revenue from the United States, fell on signs that the U.S. economy may head for a slowdown.

Infosys declined 2.9% to 1,849.10 rupees, Tata Consultancy Services was down 3.9% to 880.05 rupees, Satyam Computer Services was down 2.8% to 477.90 rupees and Wipro lost 1.5% to 473.55 rupees.

Healthcare stocks rose. Ranbaxy Laboratories gained 6.5% to 560.75 rupees, Cipla was up 2.1% to 211.05 rupees and Dr. Reddy''s Laboratories surged 0.5% to 696.50 rupees.

Reliance companies update

Reliance Industries climbed 1.7% to 2,199.40 rupees and Reliance Infrastructure lost 2.6% to 1,011.60 rupees.

World markets review

In Tokyo Nikkei 225 Index closed lower 160.21 or 1.13% to 14,021.17, in Hong Kong Hang Seng index decreased 1,026.66 or 4.21% closed to 23,375.52. In Australia ASX 200 index lower 154.60 or 2.76% to close 5,437.50. In Malaysia KL Composite index decreased 0.02 or 0.00% closed to 1,230.96.

In South Korea Kospi Index decreased 34.58 or 1.91% to close at 1,774.38, in Thailand SET index closed lower 13.64 or 1.69% to 791.94 and Indonesia JSE Index edged decreased 36.26 or 1.50% to 2,373.82. Sensex index in India decreased 176.85 or 1.17% to 14,889.25.