Sensex Drops 3%, IT Stocks Drop

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

Benchmark stock index in India dropped more than 3% after nine domestic banks are estimated to have 2,000 crore rupees exposure to the U.S. financial crisis. ICICI Bank, HDFC Bank and State Bank of India dropped. Realty stocks fell after worries of the economic slowdown gripped investors.

[R]10:00AM New York, 7:30 PM Mumbai – Stocks in India fell as banks report losses linked to the ongoing credit crisis. Inflation is expected to rise in emerging markets as negative interest rates in the U.S. export inflation to crude oil, metals and agriculture commodities prices.[/R]

Market Sentiment

In Mumbai, the BSE 30-share Sensex dropped 3.03% or 424.65 to 13,570.31, and the CNX Nifty slipped 2.28% or 96.15 to 4,126.90.

Of the stocks traded on the BSE 760 rose, 1,823 declined, and 69 were unchanged.

Trading Statistics

Daily turnover on BSE stood at 4,322 crore rupees compared with 4,886.79 rupees yesterday.

Ranbaxy Laboratories fell 11.05% to 308.85 rupees on reports Canadian drug regulator, Health Canada, notified the company that it will be cautious about its applications after authorities in the U.S. blocked the sale of more than 30 generic medicines made in two factories by the company.

Federation of Indian Mineral Industries Calls for Removal of Duty

Reuters News reported on its Web site today that the Federation of Indian Mineral Industries is asking the government to scrap the 15% duty on exports after a marked drop in prices and slowing demand from China.

The duty was levied in order to channel much of the product to the local steel industry. Federation of Indian Mineral Industries S.B.S. Chauhan said the imposition of the duty has pushed prices down by 40% in the past three months.

Also medium grade iron ore prices have slipped to $75 to $85 per ton free-on-board from $130 to $140 in June. Approximately estimated 75% of Indian''s iron ore exports are destined for China.

""""As of now there is no fresh demand from China despite Vale''s demand for higher contracted prices,"""" Chauhan said. The Brazil based Vale Doce do Rio has asked for a price increase for iron ore exports to China. China has so far not agreed to the price hike of as much as 75% matching the price hikes agreed with the Australian miners by Chinese steelmakers.

BSE and NSE to Extend Trading Hours

The BSE and NSE will extend its trading hours from tomorrow due to disruption of satellite services and extend these ne trading hour till October 8.

Trading will start as usual at 9.55 IST, but will be suspended between 11.25 IST and 12.10 IST, while the day''s session will end at 16.15 IST.

Gainers & Losers

Reliance Industries dropped 1.35% to 2,009.70 rupees.

Software shares dipped on concerns over the health of the world economy. Satyam Computer lost 6% to 331.65 rupees, TCS slid 5.91% to 720.75 rupees, Wipro declined 5.77% to 390.45 rupees, and Infosys Technologies dropped 5.19% to 1,543.35 rupees.

Realty stocks fell. Indiabulls Real Estate shed 7% at 209.50 rupees, Housing Development & Infrastructure slumped 6% to 209.60 rupees, and Unitech tumbled 3.66% to 123.80 rupees.

Also DLF fell 6.25% to 394.60 rupees on reports that the company will retrench 300 employees across all its centers and subsidiaries as it decides to slow down its project execution.

Financial stocks fell on fears that some will be vulnerable to the collapsed U.S. banks. ICICI Bank tumbled 5.48% to 599.70 rupees, HDFC Bank plunged 4.62% to 1,237.70 rupees and State Bank of India plummeted 4.08% to 1,502.75 rupees.

The Indian government notes that Indian banks will suffer losses of 600 crore rupees due to the crisis created by the failure of the U.S. financial institution.

Nine of the country''s largest commercial banks including State Bank of India, ICICI Bank and HDFC Bank have an exposure of 2,000 crore rupees in the US financial lenders.

Oil marketing companies increased after crude oil for November 2008 delivery fell to $106.07 a barrel today. BPCL edged up 2.51% to 345.55 rupees, Indian Oil Corporation advanced 1.62% to 388.60 rupees, and HPCL rose 1.24% to 233.45 rupees.

Karuturi Global rose 1.98% to 20.65 rupees on reports the company plans to raise $100 million by selling 15% stake in its Dubai based subsidiary to an undisclosed private equity firm.

Tayo Rolls slid 3.59% to 135.80 rupees after the company scheduled a board meet on September 26 to price and fix swap ratio for its 60.34 crore rupees rights issue.

Nagarjuna Construction Company shed 3.78% to 112 rupees after securing four orders of 413 crore rupees.