|
Bangalore: Indian shares dropped 4.78 per cent on Monday to their lowest level in nearly three weeks as investors fretted about the health of the global economy and a feeble debut by Reliance Power roiled sentiment.
Reliance Power ended down a whopping 17.2 per cent at Rs372.50, after falling as much as 21 per cent against the IPO price of Rs450 in a chaotic debut as global market turmoil dented investor demand following its $3 billion initial public offering, the country's largest.
The main BSE 30-share index ended down 834 points at 16,630.91, its lowest close since January 22. The benchmark opened 0.22 per cent lower and extended its losses to as much as 5.8 per cent during the day.
Twenty-five of the index's components ended in the negative zone.
"Both weak global cues and Reliance Power listing came at the same time and that sent the market into a tailspin today," said Sandeep Shenoy, strategist at PINC Research in Mumbai. "Investors should stay out in this market."
Prediction
Analysts had once expected Reliance Power to touch Rs900 when it began trading, but stock market turmoil lowered investor risk appetite and market watchers subsequently said a start of Rs75-Rs150 above the IPO price was more realistic.
Shares in Reliance Energy, which holds about 45 per cent in Reliance Power, tumbled 19.4 per cent to Rs1,582.30.
The BSE index, which has fallen about 11 per cent over the last four sessions, is 21.6 per cent below a record 21,206.77 hit on January 10. It is down 18 per cent so far this year, after rising as much as 47 per cent in 2007.
"I expect the market to remain soft in the near term. It will take some time to return to higher levels," said Jayesh Shroff, a fund manager with SBI Mutual Fund.
Religare Securities said in its weekly technical analysis the market was expected to move downward and investors should wait for an "appropriate trend" to emerge.
The index's drop below 17,200 could take it down to 16,100-16,500, it said.
Sustained withdrawals by foreigners from the Indian market has also added to the selling pressure, said Sejal Doshi, chief executive of Finquest Securities.
Foreign funds have been net sellers of more than $3 billion so far this year, after buying a record $17.4 billion of Indian equities in 2007.
The stock market turbulence has taken a toll on new share offerings.
Realty firm Emaar MGF Land withdrew its initial public offering on Friday, becoming the second Indian company in 24 hours to abandon an IPO, after Wockhardt Hospitals Ltd pulled its IPO due to poor response.
Reliance Industries, India's top listed firm, fell 6.1 per cent to Rs2,274.85, its lowest level since January 22, taking its losses to more than 13 per cent in four days.
Top bank State Bank of India dropped 6.7 per cent to Rs2,045.25, HDFC Bank lost 2.5 per cent to Rs1,410.45 and second-largest lender ICICI Bank fell 2.9 per cent to Rs1,035.70, tracking weak global sentiment on financials on fears the credit crunch would spread further.
Weak appetite
Although Indian banks have no direct exposure to the US mortgage industry that is at the centre of a credit market crisis, weak appetite in the offshore markets leads to a sell-off.
In the broader market, 2,460 losers were ahead of 238 gainers on volume of 317 million shares.
The broader 50-share NSE index fell 5.14 per cent at 4,857.
Elsewhere in the region, Colombo's All-Share index gained 0.89 per cent to 2,485.77.
Beaten down software services companies such as Infosys Technologies and Satyam Computer Services bucked the trend, mirroring gains on the Nasdaq and on fresh buying by funds at lower levels.
Infosys, India's second-largest software exporter, rose 0.5 per cent to Rs1,558.75 while fourth-largest exporter Satyam ended 3.4 per cent up at Rs423.85, and top exporter Tata Consultancy Services gained 0.4 per cent to Rs903.20. Videsh Sanchar Nigam Ltd climbed 8.6 per cent to Rs481.25 after the Economic Times reported the federal government has approved sale of 773 acres of the firm's surplus land estimated to be worth Rs100 billion.
|
