Sensex ends 2.5% down on earning worry

Sensex ends 2.5% down on earning worry
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First Published: Fri, Dec 26 2008. 05 03 PM IST
Updated: Fri, Dec 26 2008. 05 03 PM IST
Mumbai:The BSE Sensex gave up strong early gains and fell 2.5% on Friday, after sharply lower advance tax payments by companies pointed toward dismal quarterly earnings in January
Outsourcers and financials led the losses as investors saw them as more vulnerable to an economic slowdown, traders said.
Reliance Petroleum Ltd a unit of top listed firm Reliance Industries, bucked the trend and rallied 6.3% to Rs84.70 as its $6 billion, 580,000 barrels per day refinery started processing crude on Thursday.
The government said on Friday advance taxes paid by companies for the December quarter had fallen 22% from the same period a year ago, indicating a big drop in expected earnings.
“On such a day, any bad news can ruin the way the market progresses. There was just no participation at all,” said K.K. Mital, head of portfolio managed services at Globe Capital.
The broader 50-share index fell 2.04% to 2,857.25.
The 30-share BSE index fell 2.51%, or 239.80 points, to 9,328.92, its lowest close since 8 December. The index, which had climbed 1.4% early, lost 7.6% on the week, its first drop in three and the worst weekly fall in two months.
All but five of the index components fell. In the broader market, losers outran gainers in the ratio of almost 2 to 1 on moderate volume of 263.6 million shares.
Annual inflation fell to a nine-month low of 6.61% in mid-December and analysts saw it diving to 2% by March freeing the central bank to cut interest rates deeply.
Foreign funds that have sold a net of $13.3 billion of shares so far in 2008 were largely absent due to the holiday season overseas, while there was sporadic selling by some, traders said.
Outsourcers fell on concerns a weak global economy will crimp orders. IT bellwether Infosys Technologies dropped 5.3% to 1, Rs109.55, its sharpest daily fall in more than a month and top outsourcer Tata Consultancy Services eased 1.2% to Rs472.10.
ICICI Bank, the No.2 lender, led banks down, falling 5.2% to Rs417.95, its lowest close in nearly two weeks. Top lender State Bank of India shed 3.3 % to Rs1,244.25.
Satyam Computer Services rose 0.4% to Rs135.50 as investors speculated the board of the no. 4 outsourcer would set a higher price at a share buyback it is scheduled to consider on Monday.
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First Published: Fri, Dec 26 2008. 05 03 PM IST
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