Monday, March 3, 2008

Indian equities log second steepest fall of 2008

Registering the second steepest fall this year, India's bellwether index crashed over 900 points Monday on fears of a recession in the US, despite Finance Minister P. Chidambaram seeking to assuage sentiments by saying the country's growth story was intact.
"The Asian markets have slipped today (Monday) because of the fears of a recession in the US. And what is happening in India only shows that we are not as decoupled as we may think we are," the finance minister said.

"I don't think we need to worry too much about that. This is reflecting what is happening in the world market," Chidambaram told a post-budget interaction with Indian industry at the Vigyan Bhavan conference centre in New Delhi.

In the first full trading session after the finance minister presented the union budget for 2008-09 Friday, there was heavy selling in major banking, realty, IT, metal, power and capital stocks throughout the day.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened at 17,227.56 points and kept going down before closing at 16,677.88 points.

It, thus, lost 900.84 points or 5.12 percent at the day's close.

The broader 50-share S&P CNX Nifty of the National Stock Exchange (NSE), which opened at 5,222.80 points, closed at 4,953.00 points.

At close, it registered a loss of 270.50 points or 5.18 percent.

The BSE Midcap index was also down 4.11 percent, while the Smallcap index ended with a loss of 4.05 percent, data with the bourse showed.

"The fall is due to the post-budget bearish phase," said market analyst Deven Malkan, adding ordinary investors saw little in the budget for themselves as it focussed on farmers, women and senior citizens.

"Moreover, foreign funds are withdrawing from the market in a big way and the cues from global markets are making the market volatile," Malkan, also editor of Fortune India magazine, told IANS in Mumbai.

On BSE, the market breadth was negative with low trading volumes. A total of 2,330 shares declined, only 396 advanced and 40 remained unchanged.

Other global and Asian markets also ended in the red Monday. Japan's Nikkei 225 was down by 610.84 points followed by Taiwan Weighted, which tumbled 49.89 points.

The top gainers of the day at BSE included Cipla at Rs.211.65, up 2.12 percent, Hindustan Unilever Ltd at Rs.231.80, up 1.96 percent, Ranbaxy Labs at Rs.450.55, up 1.08 percent and Maruti Suzuki at Rs.874.30, up 0.82 percent.

State Bank of India led the losses, down as much as 8.83 percent at Rs.1,923.40, followed by DLF down 8.44 percent at Rs.714.70, and Housing Development Finance Corp down 8.25 percent at Rs.2,571.35.

Earlier, the finance minister told business leaders at the interactive meeting that he had not forgotten the corporate sector in his budget and said the cut in the excise rates and central value added tax (Cenvat) was aimed at them.

"You have my word - if some sector faces difficulties, if there is any signal that growth is flagging in some, my government will certainly step in and try to see what can be done," he said, adding: "India's growth storey is intact." IANS

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