Sensex sheds over 1 pct on global cues; autos, tech lead losses
MUMBAI |
MUMBAI (Reuters) – The BSE Sensex fell 1.29 percent on Wednesday, snapping a two-session rising trend, mirroring weak Asian and European peers as cooling hopes over the prospect of further economic stimulus in the United States took the steam out of a recent rebound.
State-run Coal India, the world’s largest coal miner, led losers, plunging 4.71 percent to close at 373.90 rupees on worries that 22 of its mines face closure over environmental concerns in eastern India, potentially suffering an output loss of up to 40,000 tonnes a day.
Automakers and technology counters saw heavy selling on worries of more interest rate increases in Asia’s third-largest economy despite glum global economic outlook.
“The fall in the market is led by the index funds who are selling their positions…yesterday if they ended up buying something, it was only to stabilise the market to sell further,” Deven Choksey, chief executive at K R Choksey brokerage said.
Choksey expressed concerns that many banks in the U.S. might be required to be funded because of the capital adequacy norms being put in place.
“The current fall in the market is largely driven by exchange traded funds, who are basically required to withdraw their money because the banks are required to shrink their size.”
The main 30-share BSE index closed down 213.49 points at 16,284.98, with 27 components closing in the red.
The benchmark index has shed nearly 20 percent this year as high inflation and rising interest rates have started biting into corporate profitability.
The Reserve Bank of India (RBI) has raised rates 11 times in the past 18 months to tame inflation, which eased marginally to 9.22 percent in July.
Shares in India’s top car maker Maruti Suzuki closed down 3.77 percent at 1,114.5 rupees while those of Tata Motors and two-wheeler maker Bajaj Auto lost 3.69 percent and 1.86 percent, respectively.
Shares in India’s No. 1 outsourcer Tata Consultancy Services lost 1.94 percent while smaller rival Infosys shed 1.14 percent on nagging worries about the U.S. economy, which accounts for more than half of their revenues.
“Though Europe was also reasonably okay, I think, today’s fall is more than what we had bargained for… the Dow futures have been down and we are more worried about that,” said Gajendra Nagpal, chief executive at Unicon Financial Intermedaries.
“There have been concerns regarding the IT space and the bigger picture still remains a little unclear.”
World stocks fell on Wednesday as European investors shuffled positions ahead of a Jackson Hole speech by Federal Reserve Chairman Ben Bernanke and Japanese shares sold off following a Moody’s downgrade of Japan’s sovereign debt rating.
Tokyo’s Nikkei average closed down more than 1 percent, with overseas investors, in particular, reacting negatively to the ratings downgrade.
Shares in Tata Power also fell 4.42 percent to 1,038.30 rupees on the back of higher input costs at its Mundra ultra mega power project.
Shares in India’s top lender State Bank of India fell 3.58 percent to 1,989.75 rupees.
The 50-share NSE index fell 1.21 percent to 4,888.9 points.
In the broader market, there were 1.4 losers for every gainer on a volume of 557.65 million shares.
Foreign funds have sold Indian stocks worth about $1.9 billion so far in August, after having purchased $1.7 billion in July.
At 1140 GMT, the MSCI world equity index was down 0.04 percent, while the emerging equities was down 0.83 percent.
STOCKS ON THE MOVE
* Top power equipment maker Bharat Heavy Electricals fell 0.57 percent after HSBC cut its target price to 1,590 rupees from 1,850 rupees, while retaining its ‘underweight’ rating.
* Shares in Aventis Pharma, a unit of France’s Sanofi, rose 5.24 percent to 2,150 rupees after the company said it would acquire Universal Medicare’s nutraceuticals formulations business in India.
* Shares in Lupin rose 2.77 percent to 450.15 percent after Economic Times reported that Japan’s Takeda Pharmaceutical Co was in talks to buy the India company’s domestic formulations business.
TOP 3 BY VOLUME ON NSE
* K.S. Oils on 36.06 million shares
* Suzlon Energy on 20.39 million shares
* Idea Cellular on 16.06 million shares
(Editing by Malini Menon and Clarence Fernandez)
Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/LEVyai-5kEc/idINIndia-58946420110824
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