Sensex in India Drops 2.5%

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

Mumbai stocks fell on the worrries that the world financial system may suffer for more weaknesses. Weak trading persisted on both exhanges in Mumbai as retail investors brace for losses. The benchmark index Sensex traded above 9100. Hero Honda net rises 9.3%, TCS wins IT service order from Ducati.

[R]10:00AM New York, 7:30 PM Mumbai - India rules out tax breaks before budget. World economic growth expected to drop 0.5% in 2009.[/R]

Indian stocks traded in negative territory after news that Royal Bank of Scotland is on course to realize the biggest loss ever by a British company at £28 billion, sparked fears that conditions in the credit market will deteriorate further.

In Mumbai, the BSE 30-share Sensex index fell 2.5% or 229.02 to 9,100.55, and the CNX Nifty shed 1.7% or 49.60 to 2,796.60.

Of the stocks traded on the BSE, 1,044 increased, 1,371 declined, and 61 were unchanged.

Trading Statistics

Daily turnover on the BSE increased to 2,748 crore rupees from 2,612.82 crore rupees yesterday.

No Tax Break Before Budget

Indian Planning Commission chairman Montek Singh Ahluwalia said there will be no tax break before the budget.

Ahluwalia said, “I don''t expect tax breaks between now and the budget session. What is more important is to implement the stimulus packages announced already. The government would continue to look at various measures but implementation of what has been announced is more important, you can''t just announce a package and sit back.”

World Economic Growth to Decline 0.5% in 2009

The Economic Times of India reported today that the European Commission said world economic growth is forecasted to shrink 0.5% in 2009, with economic growth in Europe expected to decline to 1.8%.

Global economic growth is projected to recover in the latter part of the year.

“Starting in the second half of 2009, global growth is expected to rise gradually but moderately as the financial market situation improves and the impact of the macroeconomic policy easing (not least in the US) gains traction. Overall, global GDP growth is expected to be around 2.75% in 2010,” said EC.

Employment is expected to fall sharply and the euro zone shedding 3.5 million jobs.

Gainers & Losers

Reliance Industries declined 3.8% after Reliance Natural Resources asked the Bombay High Court not to lift the stay on the sale of gas from Reliance Industries'' block in the Krishna-Godavari basin yesterday.

ONGC fell 1.1% as crude oil prices dropped 5% to $35.60 per barrel.

Mangalore Refinery and Petrochemicals fell 4.8% after it posted a net loss of 285.41 crore rupees in the third quarter to December 2008.

Financial stocks shed on fears that bank losses will deepen the global economic crisis. State Bank of India dipped 3.1%, HDFC Bank slipped 3% and ICICI Bank fell 3.8%.

IT stocks lost on worries over the health of the global economy after the rupee weakened to 49.17 against the dollar from 48.65 yesterday. Wipro shed 1.8%, Infosys Technologies plunged 0.8%, and HCL Technologies declined 3.9%.

TCS plummeted 0.9% to 496.10 rupees despite signing a multi-million dollar deal with Ducati Motor Holding to deliver technology-based services to the Italian bike maker and its subsidiaries in Europe.

Satyam Computer Services increased 5.5% to 26.85 rupees.

Hero Honda Motors fell 0.4%.

Hindustan Unilever fell 2.8% on reports the company has slashed prices of key soaps and detergent brands to pass on to consumers the excise duty reduction announced a month ago.

Hero Honda Net Profit Rises 9.24% in Q3

Hero Honda reported today that its third quarter profit gained 9.2% to 300.42 crore rupees from the comparable period a year ago.