Markets fall 0.7% to 6-week closing low

Markets fall 0.7% to 6-week closing low
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First Published: Mon, Dec 21 2009. 05 34 PM IST
Updated: Mon, Dec 21 2009. 05 34 PM IST
Mumbai: Indian shares fell 0.71% on Monday, a third straight fall taking them to a six-week closing low, with Larsen & Toubro and Bharti Airtel leading the losses as fund activity wound down into year-end.
Engineering and construction firm Larsen & Toubro declined 2.4%, contributing most to the fall in the index, and state-run infrastructure firm Bharat heavy Electricals fell 1.35%.
“In capital goods stocks such as Larsen & Toubro and Bhel, the institutional ownership is relatively higher,” said Vaibhav Sanghavi, director of Ambit Capital.
“Institutional participation is less with holidays coming up, and so these stocks are trading weak,” he added.
The 30-share BSE Index fell 118.63 points to 16,601.20, its lowest close since 10 November, with 23 components losing ground. The index has fallen 1.9% this month. The 50-share NSE index closed down 0.7% at 4,952.60.
The index, powered by foreign buying of $$16.5 billion of stocks up to mid-December, is up 72% this year. But it is about 5 percent below 17-month highs just under 17,500 hit in October, and has lost momentum as foreigners close their books for the end of the year.
“Holiday season has arrived. The market is moving on very little volumes. There is not much happening. The volumes have been low,” Sanghavi said.
Leading mobile operators Bharti Airtel and Reliance Communications fell 2.2% and 1.7% respectively on bleak sector outlook given growing competition and an intense tariff war.
“We believe there is no scope for a re-rating of telecom stocks, given the headwinds being faced by them and thus, maintain our negative view on the sector,” Karvy Stock Broking said in a note on Friday.
Energy giant Reliance Industries recovered from an early fall to six-week lows under 1,000 rupees to end up 0.6% at 1,016.55 rupees.
The stock has underperformed in December, on uncertainty over its bid for LyondellBasell and its court case with Reliance Natural Resources.
Bank stocks steadied after losing ground last week. The sector index gained 0.1%, but is still down 4.9% so far in December.
Sector leaders State Bank of India and ICICI Bank rose 0.1% and 0.2% respectively.
In the broader market, losers outnumbered gainers in the ratio of 1.2:1 in low volume of 318 million shares.
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First Published: Mon, Dec 21 2009. 05 34 PM IST
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