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Markets extend losses to 1% on weak Asia

Markets extend losses to 1% on weak Asia
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First Published: Tue, Jun 29 2010. 11 48 AM IST
Updated: Tue, Jun 29 2010. 11 48 AM IST
Mumbai: Indian shares extended losses to 1% on late Tuesday morning, with financials leading the decline, hurt by weak Asian stock markets.
At 11:52am, the 30-share BSE index was down 1.09% at 17,685.60 points, with 28 components declining. The 50-share NSE index was down 1.2% at 5,272.20 points.
Markets dropped 0.6% in the morning, with energy giant Reliance Industries and financials leading the decline, tailing the losses in Asian equities.
Top-listed Reliance Industries, which has the highest weight on the Sensex, was down nearly 1% at Rs1,077.45. It had rallied 3.5% over the two previous sessions.
By 11:17am, the 30-share BSE Index was trading down 0.64% at 17,660.56 points, with 23 of its components declining. The 50-share NSE index was down 0.7% at 5,295.05 points.
It has gained 4.3% so far this month and is on track to post its best monthly performance since March. “Valuations do look stretched for now. Earnings should provide more cues,” said Prakash Diwan, head of institutional business at Networth Stock Broking.
“We expect some profit-booking over the next 7-10 days.” The benchmark is up 0.8% so far this quarter, outperforming the MSCI’s broadest index of Asia-Pacific shares outside Japan, which is down 6.7% this quarter, and may post its biggest quarterly drop since the post-Lehman selloff in 2008.
For the year-to-date, Sensex is up 1.2% powered by inflows of $6.5 billion from foreign funds.
State Bank of India, India’s largest lender, recouped some of the early losses, after it set a lower-than-expected base rate of 7.5%. The stock was up 0.4%.
The central bank introduced the new lending rate system or the base rate, to ensure that larger borrowers do not bargain for cheaper rates from banks, distorting their asset-liability management.
“The tone of central bank seems to be hawkish for now. It is also clear that we can see unexpected moves any time by the central bank,” said Diwan.
Leading private-sector rivals ICICI Bank and HDFC Bank dropped 1.1% and 1.2% respectively.
Vehicles maker Tata Motors shed 0.8% on fears of equity dilution and lower earnings per share after it approved raising $1 billion through equity and convertible bonds to reduce debt and for expansion.
State-run oil explorer Oil & Natural Gas Corp was down 1.2%, after gaining 9.2% in last two sessions following India’s decision to ease price controls on gasoline and raise other fuel rates.
In the broader market, gainers led losers in a ratio of 1.2:1 in a volume of 175 million shares.
STOCKS
AstraZeneca Pharma India jumped 20% to Rs1,207.05 on a voluntary delisting plan. It said on Tuesday its board has approved a proposal to voluntarily delist the shares of the company from stock exchanges.
Maytas Infra was down nearly 2% at Rs212.80, after the construction firm said its FY10 sales slipped by more than a third to 10.98 billion rupees.
State-run oil marketing companies Hindustan Petroleum Corp, Bharat Petroleum Corp and Indian Oil Corp dropped between 1.1 and 1.8% as traders booked profits after the recent rally in the pack, dealers said.
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First Published: Tue, Jun 29 2010. 11 48 AM IST
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