Markets extend losses to 2%; banks lead fall

Markets extend losses to 2%; banks lead fall

Mumbai: Indian shares extended losses to 2% on Thursday afternoon, with banks leading the fall.

At 2:43pm, the 30-share BSE index was down 1.95% at 16,863.96 points, with 25 components falling, having been down 2% earlier. The 50-share NSE Index was down 1.9% at 5,009.75.

Markets were trading 0.3% lower in the morning on light volume, ahead of the expiry of monthly derivatives contracts and weighed down by weak Asian markets.

By 12:02pm, the 30-share BSE Index was trading down 0.3% at 17,147.70, with 14 of its components declining. The 50-share NSE index was down 0.3% at 5,090.80.

“Trade will be lacklustre until the second half when we will see more action as derivatives contracts expire today," said Vaibhav Sanghavi, director of Ambit Capital.

Reliance Industries, which has the most weight in the index, slipped 0.3% to 1,093.45 rupees as the energy major began trading ex-bonus. The company had set one bonus share for every held.

Outsourcer Mahindra Satyam extended losses and was down 4.1% at Rs86.80, after India’s federal investigation agency filed new charges over an accounting fraud that hit the company earlier this year.

The stock fell as much as 8.3% in early deals after sliding more than 10% on Wednesday.

V.K. Sharma, head of private client group at HDFC Securities, said he was advising clients to stay away from the stock until there was further clarity.

“Investors are playing a blind game until the audited numbers are out. There could be more skeletons hidden in the closet," said V.K. Sharma, head of private client group at HDFC Securities.

Earlier this month, Chief Executive C.P. Gurnani had told Reuters TV the restatement of company results for recent years would be made on or before 30 June, 2010.

Cigarette-to-hotel business ITC was down 0.9% at 266.25 rupees, after 259,923 shares changed hands in block deals on the National Stock Exchange at Rs266.35.

ITC is open to raising its holding in EIH, which runs the Oberoi hotel chain, newspapers had reported on Thursday, citing ITC’s chairman.

IT bellwether Infosys, which had touched an all-time high on Wednesday, edged 0.5% lower at Rs2,421.40.

Private-sector HDFC Bank was down 1.2% at Rs1,780.80, after rising 4.8% over four sessions.

In the broader market, losers outpaced gainers in a ratio of 1.2:1 on low volume of 122 million shares.