Stocks in India Fall 1.8%, Raju Arrested

123jump.com Staff
09 Jan, 2009
New York City

Indian stocks fell for the second day after Satyam scandal rattled investors. The Satyam chief Raju was arrested later in the evening. Oil executives strike entered the third day but in the late evening strike was called off. The benchmark index Sensex 1.9%.

[R]10:00AM New York, 7:30 PM Mumbai - Satyam Scandal rattles Sensex. Inflation drops to 5.91% for the week ended December 27.[/R]

Indian stocks fell today on lingering fears sparked by the revelations that the fourth largest software services company Satyam has been fudging accounts for the past seven years. The Andhra Pradesh Police filed criminal case against Raju and later in the evening Raju surrendered to the police in the evening.

Investors were also cautious ahead of the U.S. labor report. Economists project that U.S. non-farm payrolls will tumble by 525,000 and unemployment rate will soar 7% in December.

In Mumbai, the BSE Sensex Index fell 1.9% or 180.41 to 9,406.47, and the CNX Nifty declined 1.6% or 47.40 to 2,868.40.

Of the stocks traded on the BSE, 577 gained, 1,879 dropped, and 62 were unchanged.

Trading Statistics

Daily turnover on BSE declined to 4,192 crore rupees from 5,831.85 rupees on Wednesday, January 7, 2009.

Inflation Drops to 5.91%

Wholesale inflation fell index measured an annualized basis declined to to 5.91% for the week ended December 27 from 6.38% a week earlier.

Economists had earlier forecasted the wholesale price index to rise 6.09% the year to December 27.

Fall in fuel prices and deflation in certain manufactured products contributed to the decline.

The RBI projects that the inflation rate will be markedly lower than its March-end target of 7%.

Indian State Oil Officers on Strike For Third Day

Oil companies executives strike continued on the third day which began on January 7, will continue indefinitely if their demands for higher wages are not met.

However employees of state-run oil refiner Bharat Petroleum Corporation have reportedly called off strike and 70% of the striking employees of the firm have returned to work.

About 90% of petrol pumps were running dry today raising worries of an impending crisis.

Gainers & Losers

Satyam Computer Services fell 40.3% after revelations of accounting fraud of over 7,000 crore rupees by former chairman Ramalinga Raju.

SRSR Holdings, an investment vehicle of the promoters of Satyam Computer, have since sold a 1.3% stake of pledged shares in the outsourcing firm on the open market.

In addition, Citibank has reportedly frozen more than 30 operational accounts of Satyam Computer Services.

Other IT stocks fell despite the rupee rising to 48.30 against the dollar from 48.80 yesterday. Infosys increased 0.7%, Wipro gained 3% and Tata Consultancy Services rose 6.3%.

Reliance Industries fell 3.8% to 1,151.05 rupees after crude oil prices gained 2.3% to $42.64 per barrel sparking fears of reduced margins.

Financial stocks shed. ICICI Bank fell 2.8% to 454.85 rupees, State Bank of India declined 1.8% to 1,215.90 rupees, but HDFC Bank rose 0.1% to 1,012.30 rupees.

Axis Bank fell 7% after the bank said its gross non-performing assets gained 76% to 788 crore rupees in the three months ending December 2008 from the same period a year ago.

The lender also reported that net profit rose 63.2% to 500.86 crore rupees after total income advanced 62.3% to 3716.94 crore rupees.

Tata Steel fell 8.2% after announcing that sales volume declined 14% to 1.07 million tonnes in the third quarter to December from the comparable year ago period. Larsen & Toubro dropped 7.2% on the speculation that the company may have exposure to Satyam. Punj Lloyd fell 16.6%.

Tata Motors tumbled 5.5% as its heavy commercial vehicle unit in Jamshedpur announced it undergo a six-day block closure from January 12, 2009 on slowing demand.

Sun Pharmaceuticals Industries gained 5.7% and Aditya Birla Nuvo shed 1.3% after the company shut its fertilizer plant due to non-availability of gas because of oil officers’ strike.