Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Opinion / Online-views/  Sensex at three-week closing low; Bharti drops
BackBack

Sensex at three-week closing low; Bharti drops

Sensex at three-week closing low; Bharti drops

Premium


Mumbai: Indian shares skidded to their lowest close in nearly three weeks on Thursday as investors fled riskier assets on concerns about worsening near-term outlook for the domestic and global economies.

A slumping rupee heightened the prospect of more pain for companies with large foreign debt and kept the pressure on inflation, which has remained above 9% for a year.

Union finance minister Pranab Mukherjee said on Thursday India would need to take new policy initiatives to revive slowing growth and control inflation as fiscal and monetary options were increasingly limited.

Loading video...

The 30-share BSE Sensex dropped 0.28%, or 44.67 points, to 15,836.47, its lowest close since 25 November.

“Our focus has now shifted a bit from external events to the domestic economic slowdown and the rupee plunge and its impact on companies," said Anshu Kapoor, head of private wealth at Edelweiss Global Wealth Management.

“There are some structural issues here that need to be addressed and in the absence of that we are in for a very painful period that will test all the market participants," he said.

Bharti Airtel Ltd was the top loser in the main index, falling 3.40% to 337, as the rupee hit another record low, taking the currency’s losses to nearly a fifth from its peak in July.

Bharti Airtel had $13.2 billion in net debt as of September, mainly due to its $9 billion deal last year to buy most of the mobile operations of Kuwait’s Zain and loans taken to finance 3G spectrum and network in India.

Rival Reliance Communications Ltd, which has a $925 million dollar convertible bond maturing in March, fell 2.04% to 69.60. With the conversion price of 654 more than nine times its current stock price, the company faces a heavy redemption.

The stock market has been battered this year as stubborn inflation and high interest rates dimmed the growth outlook for the economy and corporate earnings. The global economic uncertainty has also pushed investors away from risky assets.

Foreign funds are net sellers of $300 million of Indian shares this year until Tuesday, in sharp contrast to a record investment of more than $29 billion in 2010.

The Sensex has dropped nearly 23% this year, making it the worst performing major global market index, Reuters data showed.

Lenders State Bank of India and ICICI Bank Ltd fell 2.25% and 0.65%, respectively. A series of rate increases since early last year has worsened the outlook for credit growth and asset quality of local banks.

Infosys Ltd shed 0.94% on growing worries technology spending by overseas clients could drop due to uncertainty about the global economic growth and override gains from a falling rupee.

The 50-share NSE index closed down 0.35% at 4,746.35.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 Dec 2011, 10:46 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App