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Markets close down 0.5% on weak global equities

Markets close down 0.5% on weak global equities
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First Published: Tue, Aug 24 2010. 04 04 PM IST
Updated: Tue, Aug 24 2010. 04 04 PM IST
Mumbai: Indian shares shed 0.5% on Tuesday as an anaemic global economic recovery drove investors to dump stocks across world markets.
Explorer Cairn India, the target of a $9.6 billion takeover offer by Vedanta Resources, bucked the trend and climbed as much as 5.9% on expectations for a counter-bid by Indian state firms and a new oil discovery.
Outsourcers that get most of their revenue from exports fell on concerns a slower-than-expected world economic recovery will squeeze new orders.
Metal makers also slid as copper prices declined in London as well as Shanghai.
“Weak global markets are weighing on Indian stocks. Investors should be cautious,” said Ambareesh Baliga, vice-president of Karvy Stock Broking.
The 30-share BSE index closed down 0.53%, or 97.76 points at 18,311.59 points, with 23 of its components losing ground.
The benchmark index is still up 4.8% so far this year, outperforming the broader MSCI’s emerging markets index and world stocks index that have dropped 1.3% and 6.3% respectively in the year to date.
The 50-share NSE index slipped 0.7% to 5,505.10 points.
Baliga said if the broader index fell below 5,350 support, it could trigger a sharp downward correction.
Cairn India closed up 3.2% at 354.20 rupees, after hitting 363.50, on volume of 3.5 million shares -- more than 6 times the daily average in the past three months.
“The stock is rising on expectations there may be a counter bid and this may fetch a better deal,” said Shishir Bajpai, senior vice-president of equities at IIFL Wealth Management.
“The announcement of discovery in KG-basin is also helping,” he said, adding he would recommend to stay invested in the stock.
Oil and Natural Gas Corp fell 0.8% to Rs1,272.50 after the trade minister said the state-run firm, which has a 30% holding in Cairn India, should have the last word in Vedanta Resources’ proposed acquisition.
Government sources said on Monday a counter-bid for Cairn India led by state firms cannot be ruled out. State-run energy companies GAIL India and Oil India slipped 2.1% and 3.3% respectively.
IT bellwether Infosys Technologies and rival Wipro fell 1% and 0.8% respectively.
Non-ferrous metals producer Sterlite Industries and aluminium producer Hinadalo fell nearly 4% each. Tata Steel, world’s seventh-largest maker of the alloy shed 1.5%.
Declining shares overwhelmed advancing ones in the ratio of 1.5.:1 in the broader market on relatively lower volume of 412 million shares.
Elsewhere, the MSCI’s measure of Asian markets other than Japan shed 1.3% by 1018 GMT while the pan-European FTSEurofirst 300 index of top shares was down 1.2%.
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Top mobile operator Bharti Airtel rose 1.6% to Rs322.05 on news its Kenyan unit plans to invest more than $308 million in the next 18 months in a bid to gain market leadership in the nation of 20 million mobile phone users.
Religare Enterprises rose 8.4% to Rs500.80 after the financial services firm said its founders would make an open offer for 20% of diluted equity after they raised their stake via a preferential allotment.
DQ Entertainment firmed 1.4% to Rs111.10 after it signed an agreement with footwear maker Off Road Ltd to manufacture a collection based on DQ Entertainment’s animation series ‘The Jungle Book´.
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First Published: Tue, Aug 24 2010. 04 04 PM IST
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