Indian shares to drop sharply on global sell-off

Indian shares to drop sharply on global sell-off
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First Published: Thu, Aug 16 2007. 09 35 AM IST
Updated: Thu, Aug 16 2007. 09 35 AM IST
Mumbai: Indian shares are set to open sharply lower on 16 August, caught in the draught from a sell-off across world markets that were spooked by the fallout of the US mortgage crisis on global credit.
“The market will open with a gap of a minimum 500 points within a minute of the trade, and could extend its fall to 800 points,” said V.K. Sharma, head of research at Anagram Stock Broking Ltd.
US stocks fell on 15 August, wiping out the year’s gains for the benchmark S&P 500, after top mortgage lender Countrywide Financial plunged on rumours it was having trouble raising money in the commercial paper market.
This sent Asian stocks sharply lower on Thursday. By 0316 GMT, Seoul fell 6.2%, Sydney dropped 3.5% and Tokyo was down 2.6%.
MSCI’s measure of Asia Pacific stocks excluding Japan lost 4.5%.
“The problem has now spread to the US commercial paper market from the subprime markets and it could become worse in days to come,” Sharma said.
Indian financial markets were closed on 15 August for the Independence Day holiday.
On Tuesday, 14 August, the benchmark BSE-index fell 0.11% to 15,000.91 points. It is up about 9% on the year, but is 5.5% below a record high of 15,868.85 hit on July 24.
The 50-share NSE index eased 0.08% to 4,370.20 points on Tuesday 14 August. The Nifty August futures discount to the spot index widened to 23.5 points from Monday’s 18 points.
Data showed foreign portfolio investors sold $128.7 million of Indian shares on Monday, trimming their net investment in the year so far to $9.5 billion.
Stocks to watch
* Real estate firm IVR Prime Urban Developers Ltd. makes its stock market debut. The company had priced its initial public offer at 550 rupees a share.
* Engineering and construction firm Punj Lloyd Ltd., after it raised close to $200 million through a share placement at Rs275 a share. For details, double-click on [ID:nBOM28181].
* Machine Tools maker Birla Kennametal Ltd., after it said its board would meet on Aug. 22 to consider a 5-for-1 stock split.
* State-run Engineers India Ltd., after it received a $27 million order from Abu Dhabi Polymers Co. to manage the construction of a petrochemical complex in Abu Dhabi.
* State-run power producer NTPC Ltd., after the government granted an in-principle approval for allocating 354 million tonnes of coal reserves to the company.
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First Published: Thu, Aug 16 2007. 09 35 AM IST
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