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Sensex ends 255 pts down, tracking weak Asia

Sensex ends 255 pts down, tracking weak Asia
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First Published: Mon, Aug 31 2009. 04 59 PM IST
Updated: Mon, Aug 31 2009. 04 59 PM IST
Mumbai: Indian shares shed 1.6% on Monday, snapping a 7-day winning streak as equity markets worldwide slid on profit-taking after a recent rally.
The fall erased gains in the BSE index for the month, pushing it down 0.02% in August after it rose 8.1% in the previous month.
Engineering and construction firm Larsen & Toubro fell 2.9% to Rs1,567.60 and No. 2 outsourcer Infosys Technologies dropped 2.5% to Rs2,132.30 to lead the losses on Monday.
Energy giant Reliance Industries with the most weight in the main index eased 3.2% to Rs2,004.10.
Top telecoms firm Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, slid 2.3% to Rs424.70.
“Over the next seven to eight days, the market looks like it will take a breather,” Manish Sonthalia, portfolio manager at Motilal Oswal Financial Services, said.
Oil and Natural Gas Corp bucked the trend and rose 0.5% to Rs1,185.20, after the state-run explorer said late on Friday it had discovered gas at a block in the north-eastern state of Tripura.
Top vehicle maker Tata Motors slipped 0.1% to Rs489.35. The company posted a consolidated first-quarter loss on Monday as its loss-making Jaguar and Land Rover (JLR) unit erased gains from accounting changes and asset sales.
The 30-share BSE index ended down 1.61%, or 255.70 points, at 15,666.64, with 22 stocks declining, after falling as much as 2.1% during trade. The 50-share NSE index fell 1.5% to 4,662.10.
“This may be just a temporary blip. As Asian markets are lower, we are also retreating,” Hemant Thukral, vice president at Asian Markets Securities, said.
“We see that there is more interest from market participants, and there may still be some buying left.”
On Friday, the market gained for a seventh day in a row for the first time in 4 months, finishing at its strongest level since 3 August, when it had closed at a 14-month high.
Equity markets worldwide have been boosted recently by a view the global economy was on the road to a sustainable recovery.
But the Indian market has recently been plagued by worries about a weak monsoon, high valuations and looming inflation.
India’s economy grew 6.1% in the June quarter from a year earlier, roughly in line with forecasts, as government stimulus measures helped spur demand, but a poor monsoon threatens to crimp growth later in the year even as it drives prices higher.
Monsoon rains may improve next month but are still set to be the worst in four decades, and the associated slow filling of reservoirs is putting winter crops and power supplies at risk.
Having priced in a global upturn, investors are still looking for more signs world growth can be sustained once the impact of massive government stimulus spending fades, some analysts say.
There are also worries stocks may have moved ahead of economic fundamentals and could be due for a correction.
“We remain cautious on the markets over the next six months as we believe concerns over deficient monsoon, high fiscal deficit, expected supply of papers and possibility of stimulus rollback will be more closely monitored,” Edelweiss Securities said in a note to clients.
In the broader market, gainers led losers 1,656 to 1,172 on relatively heavy volume of 571.6 million shares.
Asian shares were lower, with Japan’s Nikkei falling 0.4%, while MSCI’s measure of other Asian markets fell 1.3%.
At 5:17pm, the FTSEurofirst 300 index of top European shares was down 0.5%.
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First Published: Mon, Aug 31 2009. 04 59 PM IST
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