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Markets end nearly 1% down led by Infosys, Reliance

Markets end nearly 1% down led by Infosys, Reliance
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First Published: Mon, May 03 2010. 04 57 PM IST
Updated: Mon, May 03 2010. 04 57 PM IST
Mumbai: Indian shares opened the month on a weak note and shed nearly 1% on Monday, as global markets dragged lower on concerns over the bailout package for debt-laden Greece and fiscal problems in the euro zone.
Export-driven outsourcer Infosys Technologies was among the worst hit on weaker-than-expected US economic growth, and closed 1.5% lower.
European shares fell on concerns that a 110-billion euro rescue package to Greece, the biggest ever for a single country, may still face political hurdles and that austerity measures Athens agreed to enforce in exchange may prove too tough to sustain.
The 30-share BSE index closed 0.98% or 172.63 points lower to finish at 17,386.08 points, with 24 of its components declining. The 50-share NSE index closed 1.1% lower at 5,222.75 points.
The benchmark had eked out a 0.2% gain in April, after rising 6.7% in March and 0.4% in the month before.
“If we go back in time, we had Lehman Brothers going bankrupt some time after Bear Stearns case happened,” said Sanjeev Patkar, director of research at Almondz Global.
“Similarly, after one Greece, other names are not ruled out. Just that they may not come in anytime soon. But there could definitely be more in the offing,” he said.
There were concerns that the euro zone troubles may slow down foreign portfolio investment, which has been a key driver for emerging markets like India.
Foreign funds have poured about $6.5 billion into Indian shares so far this year, after a record $17.5 billion in 2009 fuelled a rally and saw the benchmark index gain 81%.
A portion of the investment this year was directed towards primary market issuance.
The initial public offer by state hydropower utility SJVN Ltd to raise up to $240 million was subscribed 3.8 times by 3:00pm, on Monday, the last day of sale, data from the stock exchange showed.
China’s tightening moves and a survey that showed India’s manufacturing in April expanded at a slower pace for the second month following a drop in new orders and output also added to the shaky sentiment.
Metal makers declined on concerns metal prices could edge lower.
“Metals prices have risen without a commensurate rise in demand. Also, China’s tightening measures could hurt metals,” said Vaibhav Sanghavi, director of Ambit Capital.
Sterlite Industries and Hindalco declined 2.4% and 2.8% respectively.
Tata Steel, world’s eighth-largest steel maker by output, dropped 1.7%.
Automobile stocks such as Maruti Suzuki and bike maker Hero Honda bucked the trend and rose following robust April vehicle sales.
Top motorcycle Hero Honda gained 0.9% after its sales nudged up 0.3%.
Maruti rose 0.2% after the leading car maker said April sales rose 29.7%.
In the broader market, losers outnumbered gainers in a ratio of 1.3:1 in a volume of 333 million shares, lower than that on Friday.
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First Published: Mon, May 03 2010. 04 57 PM IST
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