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Sensex falls to 2-month low below 17,000

Sensex falls to 2-month low below 17,000
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First Published: Thu, May 06 2010. 05 18 PM IST
Updated: Thu, May 06 2010. 05 18 PM IST
Mumbai:
Indian shares fell for a fourth day on Thursday, losing 0.6% to their lowest close in two months, as investor appetite soured on worries the Greek debt problems could spread to other euro zone countries.
Traders said a mild recovery in European stocks helped trim the losses after the market had dropped more than 1.5% at one stage, but the main index still ended below 17,000 points for the first time since early March.
“We’re in a tug-of-war kind of situation,” said Nitin Rakesh, CEO of Motilal Oswal’s asset management business. “The domestic environment is healthy, but global cues are uncertain.”
Quarterly earnings from companies have reinforced expectations for robust growth in India, with the economy forecast to expand 8.5% in the fiscal year that started on 1 April.
However, there are concerns foreign portfolio investment, which is a key driver for the stock market, could be hit if the global investor confidence is dented by the debt problems in Europe.
The 30-share BSE index shed 0.59%, or 100.43 points, to 16,987.53 points, its lowest close since 5 March, after sliding to 16,823 during trade. Twenty-one of its components lost ground. The 50-share NSE index closed 0.7% lower at 5,090.85.
Foreign funds have pumped a net of $6.6 billion into Indian stocks so far in 2010, but the benchmark is down 2.7% in the period. In 2009, the funds had invested a record $17.5 billion and helped the index jump 81%.
At 3:39pm, the pan-European FTSEurofirst 300 was up 0.6%, while the MSCI index of Asia ex-Japan stocks .MIAPJ0000PUS dropped 2.2%.
Index heavyweight Reliance Industries dropped nearly 1% to Rs1,010.90, as investors awaited a court ruling that could determine whether the energy major stand to make or lose billions of dollars from gas sales.
The country’s top court is expected to rule by next week on the long dispute between the Mukesh-Ambani controlled Reliance Industries and Reliance Natural Resources, which is led by estranged younger brother Anil Ambani.
Telecom stocks slid as bids for one set of nationwide third-generation mobile spectrum licences reached $2.46 billion on Wednesday, leading to concerns the huge cost could dent the winning companies’ earnings.
Top mobile operator Bharti Airtel closed 1.8% lower while rival Reliance Communications shed 1.9%. Private-sector lenders ICICI Bank and HDFC Bank dropped 0.1% and 0.8% respectively, while Housing Development Finance Corp shed 1.6%. Top lender State Bank of India bucked the trend and closed 1.1% higher.
In the broader market, losers outpaced gainers in a ratio of 1.1:1 in relatively lighter volume of 383 million shares on the Bombay Stock Exchange.
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First Published: Thu, May 06 2010. 05 18 PM IST
More Topics: Markets | India | BSE | NSE | Sensex |