Sensex in India Drops 2.9%

Darlington Musarurwa
08 Jun, 2009
New York City

The benchmark indexes after rallying for thirteen weeks closed lower. Foreign investors added net $640 million or 2,600 crore rupees of stocks. Tata Steel shipment in May increased 18%. Indiabulls Real Estate reported quarterly loss. Airlines plunged after IATA doubled its estimate of losses.

[R]6:00 PM Mumbai, 8:30AM New York – The benchmark indexes after rallying for thirteen weeks closed lower. Foreign investors added net $640 million or 2,600 crore rupees of stocks. Tata Steel shipment in May increased 18%. Indiabulls Real Estate reported quarterly loss. Airlines plunged after IATA doubled its estimate of worldwide loses for the year.[/R]

Stocks opened lower and quickly recovered after less than thirty minutes of trading. Benchmark indexes steadily declined as buyers stayed on the sidelines. The weak opening in the European markets dragged indexes lower at close.

The Sensex index in India decreased 437.63 or 2.90% closed to 14,665.92 and CNX Nifty index declined 157 or 3.4% to 4,429.90.

Of the 30-stocks in BSE, 26 decreased and 4 increased.

Foreign investors net purchased 2,600 crore rupees ($640 million) in June after adding 20,600 crore rupees and for the year net purchases surged to 23,918 crore rupees.

On the BSE, the daily turnover decreased to 7,335 crore rupees from 8,997.38 crore rupees. On the NSE, trading volume decreased to 21,307 crore rupees from 26,776 crore rupees.

Of the stocks traded on the BSE, 577 increased, 2,242 decreased and 33 were unchanged.

Gainers & Losers

Tata Steel plunged 10.2% as industrials and cyclical stocks fell in the sell-off. Steel sales in the May month increased 18% to 469,000 tons from a year ago.

Reliance Industries decreased 1.1% to 2,188.90 rupees and traded as low as 1,848 crore rupees. Mumbai High Court is expected to deliver its decision on the long running dispute between Reliance Industries and Reliance Natural Resources this week.

Cairn India decreased 5.3% and ONGC declined 5.6%.

Airlines declined after the International Air Transport Association doubled its estimate of ne worldwide losses in the industry to $9 billion from its previous assessment only three months ago.

Kingfisher Airlines decreased 10.2% to 62.30 rupees, Jet Airways Limited plunged 12.3% to 308.90 rupees and SpiceJet Limited dropped 9.6% to 22.05 rupees.

Bank stocks fell after the government increased its scheduled auction of government debt to 15,000 crore rupees from 12,000 crore rupees.

State Bank of India plunged 6.7% to 1,695.10 rupees, ICICI Bank decreased 3.6% to 724.25 rupees and HDFC decreased 1.4%.

Real estate stocks declined after Indiabulls Real Estate reported fourth quarter net loss of 3.9 crore rupees compared to profit of 27.8 crore rupees a year ago. Indiabulls plunged 10.1% to 208.20 rupees.

Infosys Technologies increased 2.5% in a rally that lifted software outsourcing companies. Infosys is expected to open a back office center in Brazil before the end of the year.

Rupee declined to 47.54 from 47.10 against a dollar.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 97.62 or 1.00% to 9,865.63, Hang Seng index in Hong Kong decreased 426.14 or 2.28% closed to 18,253.39, CSI 300 index in China higher 9.17 or 0.31% closed to 2,948.48.The KL Composite index in Malaysia lower 2.65 or 0.25% closed to 1,072.85.The Markets of Australia were closed today.

The Kospi Index in South Korea decreased 1.41 or 0.10% to close at 1,393.30. SET index in Thailand closed lower 4.54 or 0.75% to 600.03 and JSE Index in Indonesia decreased 22.28 or 1.07% closed to 2,056.65. The Sensex index in India decreased 437.63 or 2.90% closed to 14,665.92.