Satyam effect: Re dips again as stocks fall

Satyam effect: Re dips again as stocks fall
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First Published: Wed, Jan 07 2009. 10 57 PM IST
Updated: Wed, Jan 07 2009. 10 57 PM IST
Mumbai: The rupee fell to the lowest this week as stocks tumbled after the chairman of Satyam Computer Services Ltd resigned, saying the software company had falsified accounts and assets.
The currency retreated for a second day and Bombay Stock Exchange’s benchmark index, the Sensex, slumped the most in more than two months on concern foreigners will dump equities. Hyderabad-based Satyam Computers’ profits from the main business have been inflated over a period of last several years, the company said in a statement, citing a letter to its board from chairman B. Ramalinga Raju.
It’s the Satyam effect, said Sanjay Arya, treasurer at state-owned Bank of Maharashtra in Mumbai. The rupee has been continuously tracking equities and has now weakened in response to the poor sentiment in the stock market.
The rupee slipped 0.1% to 48.73 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. The currency, which last month reached a record low of 50.615, may weaken to 49 in the coming days, Arya said.
Satyam plunged a record 78%, dragging the Sensex, down 7.3%, its biggest drop since 24 October. The gauge gave up all its gains from the first four trading sessions of this year. Foreign funds bought more Indian shares than they sold on all those days, according to data provided by India’s market regulator.
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First Published: Wed, Jan 07 2009. 10 57 PM IST
More Topics: Satyam | Rupee | BSE | Ramalinga Raju | Money Matters |