Mumbai: The Sensex plummeted more than 2% in early trade on Monday on domestic and global economic concerns, as worries about the sluggish Indian economy and tumbling foreign markets sapped investor confidence.
Reliance Industries, India’s largest-listed firm, also weighed on the market as it fell as much as 4.1% on its move to absorb its Reliance Petroleum unit, before trimming its losses. Reliance will offer one share for every 16 held in its 70% owned unit, which runs a refinery.
“The ratio was slightly worse than we expected, so Reliance had to tumble. But on the other hand, it is cancelling its treasury stock, which means its earnings per share will go up, so we saw the recovery,” said V.K. Sharma, head of research at Aanagram Stock Broking.
Global concerns were weighing on the stock, traders said. “It may not be able to counter the persistent headwinds from the global markets,” said a note from brokerage India Infoline.
Data last week showed the economy grew an annual 5.3% in the December quarter, it slowest pace in almost six years. On Monday a survey showed manufacturing shrank for a fourth straight month in February.
“The weak economic data is already reflected in the falling rupee, and no one would want to put money into our markets now,” said Sharma.
At 10.36am, the 30-share BSE Index was trading 2.25% down, at 8,691.12 points, with 27 components losing.
Reliance Industries was trading down 2.4% at Rs1,234.55, and Reliance Petroleum was down 0.66% at Rs75.70.
Leading car maker Maruti Suzuki <MRTI.BO> rose 0.35 percent to 680 rupees, after the company’s February sales rose 24.1 percent from year ago. [ID:nBMA002471]
In the broader market losers led gainers by more than 2 to 1 on moderate volumes of 39.1 million shares.
The 50-share NSE Index was down 2.36% at 2,698.35 points.
TVS Motor Co, was up 2.3% at Rs19.80 after the motorcycle maker said on Sunday two-wheeler sales for February rose an annual 13% to 107,301 units.
Two-wheeler maker Bajaj Auto was down 1.75% at Rs524, after reporting February sales fell an annual 16%. It had been earlier down as much as 5.3%.