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Sensex closes 51.80 points lower in volatile trade

Sensex closes 51.80 points lower in volatile trade
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First Published: Mon, Mar 10 2008. 05 09 PM IST
Updated: Mon, Mar 10 2008. 05 09 PM IST
Agencies
Mumbai: The Sensex closed 0.32% lower on 10 March 2008 in volatile trade that saw large-scale buying by domestic mutual funds, dealers said.
They said the domestic funds snapped up bank shares that fell sharply in early trade in reaction to wholesale price inflation crossing a 10-month high of 5% on Friday, above the central bank’s forecast.
The benchmark Mumbai stock exchange Sensex index ended down 51.80 points or 0.32% to 15,923.72.
“Mutual funds propped up the market on bargain hunting. But retail investors are nervous about the inflation outlook,” said Hiten Mehta, senior fund manager with brokerage Fortune Financial Services.
Inflation climbed more than 0.1 percentage points to 5.02% for the week ended 23 February from 4.89% the previous week, according to the wholesale price index, India’s most watched cost-of-living monitor.
During the course of the day, the Sensex had plunged to a low of 15,362.17 and saw a high of 15,998.33 points.
The 50-share Nifty of the National Stock Exchange ended higher by 38.80 points at 4,800.40, after dipping to 4,620.50 and rising to 4,814.95 points as some stocks like Reliance Industries, State Bank of India and HDFC Bank gained fresh ground.
Morning trade
The Bombay Stock Exchange benchmark Sensex lost 483 points in early trade today on selling by funds in heavy-weight stocks, led by capital goods.
The 30-share index, which closed at 15,975.52 points on Friday, plunged by 483.44 points to 15,492.08 in the first five minutes of trade.
The National Stock Exchange index Nifty too dropped by 136.95 points to 4,634.65.
Marketmen said selling pressure gathered momentum following reports of a melt down in the US market on rising concern of recession.
They said, the Sensex suffered the most as bluechip stocks like Larsen and Toubro and Reliance Energy fell sharply.
Shares drop more than 3%
Shares on the Indian stock bourses fell more than 3% to near their lowest for 2008 on Monday, hit by inflation worries and global market losses, with infrastructure play Larsen & Toubro Ltd dropping as much as 12.5%.
Shares in Larsen fell after brokerage Motilal Oswal said one of its Middle East arms had possibly booked a net loss of Rs924 million from commodity hedging.
However, L&T’s chief financial officer told Reuters that losses from hedging would be compensated almost entirely by its overall margin expansion. Indian banks extended losses as sentiment toward financial stocks remained remained negative on fears of the consequences of a global credit crunch and worsening world economic outlook.
Leading private bank ICICI Bank was down 4.3% to Rs854, at its lowest since August, and State Bank of India fell 2.4% to Rs1,798.
“The markets will remain lower in the near term unless the global economic factors show some improvement,” said Chetan Shah, senior portfolio manager at Religare Securities.
At 10:42 a.m, the benchmark BSE 30-share index was down 3.09% or 494.28 points at 15,481.24, with 25 components in the red. It dropped 27% from a life high of 21,206.77 hit on 10January.
“If anything, bad news just doesn’t appear to stop at the moment. The next big trigger is the 18March meeting of the Federal Reserve,” brokerage India Infoline said in a client note.
In the broader market 2,026 losers lead 181 gainers on volume of 68 million shares.
Religare’s Shah said Indian markets were also unsettled by rising inflation and expectations of an early elections.
“Except for the GDP growth, India’s management of fiscal deficit has never been attractive on the macro-economic front,” he said.
Inflation hit 5% in late February for the first time since last June, dashing hopes of a local rate cut, even though economic growth is moderating. Top economic policy maker Montek Singh Ahluwalia told Reuters hat India needs to be vigilant about rising food prices, but achieving a goal of 9% economic growth on average over the next few years was feasible.
Reliance Industries Ltd , India’s largest listed firm, fell 3.2% to Rs2,690. The 50-share NSE index was down 2.54% at 4,650.55.
Elsewhere in the region, Karachi’s 100-Share index was down 0.03% at 15,073.23 points, while Colombo’s All-Share index had risen 0.05% to 2,569.12.
Stocks on the move
* Parry Agro Industries Ltd rose nearly 4% to Rs1,901after majority stakeholder, New Ambadi Estates, made an open offer to buy 15.11% in the company at a floor price of Rs1,759.11, ahead of delisting the stock.
* Thomas Cook India Ltd rose to its daily limit of 5% to Rs92.90 after Thomas Cook UK Ltd made an open offer to acquire about 20.4% of the company at Rs107 per share.
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First Published: Mon, Mar 10 2008. 05 09 PM IST
More Topics: Stocks | Sensex | Nifty | BSE | Reliance Energy |