Sensex Down 2.3%, Reliance Drops 4%

123jump.com Staff
11 Sep, 2008
New York City

Developing nations financial system weakness and continued worries of global markets dragged stocks in India lower. The benchmark indexes Sensex and CNX Nifty declined 2.3% and 2.5% respectively dragged by a decline in energy, realty and financial sectors. After the close inflation report showed a slight decline from the previous weekly read. Reliance fell below 2,000 rupees for the second time this year after the worries that exports from the refinery may be banned.

[R]5:00PM Mumbai – Stocks in Mumbai fell for the third day in a row. The bench mark index Sensex dropped 2.3% and declined 30% for the year.[/R]

Stocks in Mumbai trading fell for the third time this week as lingering global credit market worries in the developing nations kept foreign buyers on the edge. Energy, realty and financial companies led the decliners in today’s trading.

Inflation Declines, But Elevated

Annualized inflation at the end of the 52 weeks ending on August 23, declined to 12.34% from 12.4% from the previous week period. The inflation report was released after the close of market trading.

Auto Sales Decline

August sales of automobiles fell 4.4% to 94,584 from 98,893 from a year ago according to a report released by the Society of Indian Automobile Manufacturers. Motorcycles and scooters segment continue to grow but at a slower pace as reported by the national association. For four months ending in August the sale of motor cycles rose at 11.9% from a year ago and scooters sales increased at 6.8% in the period. Two wheelers account for 75% of all vehicle sales and passenger cars account for 5% of all sales.

Foreign Investors Sell

Sensex Index of 30 stocks on the Bombay Stock Exchange declined 2.3% or 338.32 to 14,324.29 and CNX Nifty Index on the National Stock Exchange of 50 stocks fell 2.5% to 4,290.

Foreign investors were net sellers and sold stocks worth 1.51 billion or $40 million on September 11. For the current year foreign investors have sold more than $4 billion of stocks and benchmark index has declined 30%.

Trading Overview

On the NSE trading value declined to 10,782 crore rupees from 11,988 crore rupees a day ago. Trading turnover on the BSE was 4,776 crore rupees compared to 5,185.84 crore rupees a day ago. Of the shares traded on the BSE, 1,786 declined 853 increased and 75 were unchanged.

IFCI led the volume leaders on BSE trading with a turnover of 1.5 crore shares followed by Tata Teleservices, Reliance Natural Resources, Austral Coke Projects and Reliance Petroleum.

Stock Movers

Reliance Industries led the trading volume list with a turnover of 478 crore rupees followed by ICICI Bank of 165 crore rupees, and L&T of 145.88 crore rupees.

Reliance Industries fell 4.1% to 1,997.60 rupees after market fears that petroleum exports from Jamnagar refinery may be imposed by India. The market fears could not be confirmed.

ONGC dropped 3.8% to 1,035 rupees and NTPC declined 2.67% to 173.45 rupees. National Thermal Power Corporation and Bihar State have entered in a joint venture to set up a coal based power plant with a capacity of 2,000 mw.

Sterlite Industries, miner and refiner of zinc, copper and alumimium fell 1% to 502.75 rupees, 19% decline in two days after it announced a restructuring plan that displeased shareholders.

Bharti Airtel fell 4.4% to 776 rupees. The mobile carrier reported a launch of venture fund to develop content with an initial investment of 200 crore rupees or $42 million.

Stocks in banking sector fell as global markets weakness dragged the sector lower across Asia. ICICI Bank fell 2% to 686 rupees, State Bank of India declined 1.7% to 1,538 and HDFC Bank lost 1.9% to 1,252 rupees.

Europe Markets Review

In London FTSE 100 Index closed lower 47.80 or 0.89% to 5,318.40, in Paris CAC 40 Index decreased 34.59 or 0.81% to close at 4,249.07 and in Frankfurt DAX index lower 31.42 or 0.51% to close at 6,178.90. In Zurich trading SMI decreased 50.18 or 0.70% to close at 7,071.25.