Senesx in India Plunges, Global Bank Worries

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

Sensex in India dropped 3.5% and the index fell below 9,000 for the first time in three years. Global market weakness and new worries of the banking sector in the U.S. and UK dragged confidence in Asian markets including India. Satyam founder admitted of diverting company funds to other ventures.

[R]10:00AM New York, 7:30 PM Mumbai - Sensex drops on fear on deepening global economic woes.[/R]

Indian stocks slipped on an Asia wide rout on the fears that the global financial crisis will linger on longer-than expected.

In Mumbai, the BSE 30-share Sensex index fell 3.5% or 321.38 to 8,779.17, and the CNX Nifty lost 3.2% or 90.45 to 2,706.15.

Of the stocks traded on the BSE, 737 increased, 1,691 declined, and 40 were unchanged.

Satyam Admits to Diverting Funds

Economic Times of India reported today that the founder and chairman of Satyam Computer Services Ramalinga Raju said he diverted money from the IT company to two real estate companies, Mytas Properties and Mytas Infra that are promoted by his family.

The funds were allegedly diverted in the past four to five years.

Raju also admitted to using the company’s funds to purchase land in and around Hyderabad.

In addition, the report said Raju misled company auditors PricewaterhouseCoopers by submitting bank documents.

Gainers & Losers

Reliance Industries declined 5.3% to 1,119.40 rupees on fears the recent drop in oil prices will squeeze profit margins.

Bharat Heavy Electricals fell 3.4% ahead of its third quarter earnings.

Hero Honda Motors rose 0.6% as the company’s profit rose 9.2% to 300.42 crore rupees in the three months to December from the same period a year ago.

National Aluminum Company rose 1.3%.

Tata Steel shed 3.3% after its Thailand-based unit reported a record quarterly loss.

Financial stocks declined. State Bank of India dropped 2.7%, HDFC Bank shed 2.5% and ICICI Bank plunged 7.1%.

HDFC fell 7.5% after its net profit fell 15.7% to 546.83 crore rupees in the quarter to December from the comparable year ago.

IT stocks dropped. Wipro lost 3.4% after the company reported net profit rise of 14% to 733 crore rupees, Infosys Technologies declined 2.1% and HCL Technologies gained 3.1%.

Satyam Computer Services increased 3.4% on the speculation that Larsen & Tobro may acquire the company.

Educomp Solutions plummeted 22.1% to 1,534.90 rupees on speculation the company may have fabricated its accounts overstating its turnover and profits to boost share prices.

Kilburn Engineering increased 6.2% after it received an order worth 11.1 crore rupees from Tata Chemicals.

Deepak Fertilisers and Petrochemicals fell 3.5% after it reported a 9 % drop in net profit to 22.38 crore rupees in the three months to December.

Kirloskar Oil Engines dipped 3.8% after its net profit fell 54% to 9.99 crore rupees in the December quarter.

Tata Soars Stake in Neotel to 56%

Tata said in a statement today that the company bought a further 30% that were previously held by South African parastatals in Eskom and Transnet in Neotel to 56%.

Tata Communications in association with Tata Africa Holdings becomes a controlling shareholder in Neotel.