Sensex in Mumbai Drops 4%

123jump.com Staff
18 Nov, 2008
New York City

Stocks in India dropped on global economic worries, falling exports, weak local demand and recent regional elections results. Rupee flirted near 50 to a dollar. Finance minister Chidambaram estimated that the economy will rebound in the next fiscal year to 9% on the rise in domestic demand.

[R]3:50PM New York, 7:30PM Mumbai – Stocks in Mumbai trading dropped on global economic worries, falling exports, weak local demand and recent regional elections results.[/R]

Market Sentiment

The benchmark index in Mumbai trading dropped nearly 4% on negative economic reports, weak global market sentiment and uncertainty from the latest regional polls.

In Mumbai, the BSE 30-share Sensex lost 3.8% or 353.81 to 8,937.20, and the CNX Nifty declined 4.1% or 116.40 to 2,683.15. Of the stocks traded on BSE, 661 rose, 1,831 declined, and 75 shares remained unchanged.

Trading Statistics

Daily turnover on BSE dropped to 3,022 crore rupees from 3,230.17 crore rupees yesterday.

Chidambaram Expects Economic Rebound

Finance Minister Palaniappan Chidambaram estimated that the economy will grow at 9% rate in the next fiscal year on rising local demand. However, Reserve Bank of India forecasts that economic growth will slow to 7.5% in the current fiscal year through March.

Chidambaram says the economy will be back on track in the next six to 12 months despite weak exports, net decline in international capital flows and the global weakness.

Chidambaram encouraged manufacturers and service providers to lower prices and drive the demand. He noted, “Hotels must cut tariffs. Airlines must cut prices. Real estate must cut prices of homes and apartments they sell. Carmakers, two-wheeler makers must cut prices. The classic response to a demand slowdown is to cut prices for a short time.”

The finance ministry also announced a 5% import duty on specified iron and steel products and a 20% customs duty on crude soybean oil.

India will however miss its $200 billion export target.

Gainers & Losers

Reliance Industries fell 0.2% to 1,140.70 rupees.

Jaiprakash Associates fell 6.2% to 67.90 rupees, Bharti Airtel declined 6.3% to 623 rupees and Tata Power Company shed 5.8% to 682.70 rupees.

NTPC dropped 7.9%.

Commodity stocks fell on concern over slowing demand. Tata Metaliks declined 4.9% after the company announced that it will close its furnaces for a three-week long repair and maintenance.

IT stocks fell despite a fall of the rupee to 49.72/75 against the dollar. Wipro shed 8.8%, Infosys declined 4.2%, Satyam Computer Services fell 3.9% and Tata Consultancy Services plunged 7%.

Carmakers fell as demand waned on rising fuel prices. Automotive Axles climbed down 10.4% but Hero Honda Motors soared 0.1%.

Financial stocks slid after ICICI Bank cut its target for growth in lending to 15%. ICICI Bank fell 6.8%, HDFC Bank declined 1.8% and State Bank of India plunged 5.1%.

Bharat Heavy Electricals fell 2.1% despite new contract of 1,325 crore rupees for the supply of the plant package for a power project in Andhra Pradesh.

Binani Industries fell 18.9% after canceling a proposed share swap with two group companies.

Everest Kanto Cylinder jumped 2.5% after deferring a buyback plan.

Pantaloon Retail India fell 3%.