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Markets at 2-month low on weak global cues

Markets at 2-month low on weak global cues
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First Published: Mon, May 17 2010. 12 14 PM IST
Updated: Mon, May 17 2010. 12 14 PM IST
Mumbai: Indian shares fell to their lowest in two-and-a-half months on Monday morning and were trading 2.5% lower, as world markets plunged on concerns over Europe’s sovereign debt crisis which saw investors opting for safer bets over riskier assets.
Financials and energy giant Reliance Industries led the declining stocks, with only one component of the main stock index trading in the green.
By 11:49am, the 30-share BSE index was trading down 2.5% at 16,571.19 points. It dipped as much as 16,563.70 earlier, its lowest level since 2 March. The 50-share NSE index was down 2.4% at 4,971.30 points.
“Our economy is strong. But, the market is driven by money, which is not coming in for now,” said Arun Kejriwal, director of research firm KRIS.
Foreign funds have pulled out around $500 million from Indian equities so far this month, with the Sensex dropping 5.6% in the period.
They have still invested a net of nearly $6 billion in Indian stocks so far this year, after a record $17.5 billion in 2009.
“When the big economies which are major investors in our country are worried over the woes in Europe, do they have the time and inclination to look at an economy like us?,” said Kejriwal.
Top-listed firm Reliance Industries, which has the highest weight on the Sensex, was down 3% to Rs1,013. Top lender State Bank of India dropped 3.5%.
Local brokerage Anand Rathi said it retained “sell” rating on the stock as high employee pension liabilities and accelerated provisions are likely to keep the bank’s return on equity lower than its peers. Leading private lenders ICICI Bank and HDFC Bank were down 2.7% and 1.9% respectively.
Metals stocks were trading sharply lower as base metals extended losses with Shanghai copper slipping to three-month lows and its London equivalent at its weakest in almost two weeks.
Tata Steel, the world’s eighth-largest steelmaker, was down 4%. Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco were down 1.5% and 1,4% respectively.
Reliance Communications was down nearly 2%. The No. 2 mobile phone operator reported a 16% fall in quarterly profit over the weekend, hit by a call price war, but the fall was smaller than expected due to higher net interest income.
Top-listed real estate firm DLF was down 5.3% at Rs282.95. Improved demand for real estate helped the company to more than double its quarterly net profit from last year, when an economic slump had hit demand, but its earnings came below some analysts’ expectations.
In the broader market, losers were nearly four times the number of gainers in a volume of 112 million shares.
Elsewhere in Asia, the MSCI’s measure of Asian markets other than Japan was down 3.6 while Japan’s Nikkei shed 2.2%.
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First Published: Mon, May 17 2010. 12 14 PM IST
More Topics: India | Stocks | BSE | NSE | Sensex |