Financial Daily
from THE HINDU group of publications

Saturday, September 15, 2001



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Gloom continues on negative sentiment

Sowmya Krishnan

INDIA'S key share index fell more than five per cent to a new 33-and-a-half month closing low on Friday amid heavy selling by foreign funds as investors took fright of a possible US retaliation causing instability concerns in the region.

The benchmark top-30 share Bombay Stock Exchange index tumbled more than seven per cent before it clawed back to finish down 5.27 per cent at 2,830.12 points, its lowest close since December 1998. There were fears that mutual funds could face heavy redem ptions in the US, when Wall Street reopens for business on Monday after remaining shut for four days.

For the week, the benchmark Bombay index lost a whopping 11.5 per cent while its loss since the start of the year swelled to 28.75 per cent, making it one of the biggest losers in Asia this year.

Traded volume on the Bombay exchange surged to a four-week high as domestic and State-controlled mutual funds bought to steady the market. Data from the exchange showed 5.36 crore shares changed hands, up from 4.32 crore on Thursday.

The market breadth was markedly negative as 1,014 losers overwhelmed only 149 gainers for the day. The extent of panic was also reflected by 327 shares -- 13 among the top-30 in the Bombay index -- hitting year lows.

The broader 50-share National Stock Exchange index closed down 5.35 per cent at 919.70 points (971.70 points). Decliners trailed advancers 687 stocks to 82 stocks. 794 issues were traded on the NSE on Friday and the volumes stood at 8.99 crore.

Software, pharmaceutical and cement shares were the biggest losers. Infosys Technologies closed down 8.23 per cent at Rs 2,909, Wipro fell 10.39 per cent to Rs 1265.30 and Satyam Computer lost 3.03 per cent to Rs 141. The falling Indian currency also wr ecked the sentiment. The rupee weakened to a lifetime low of 47.83 per dollar on demand from importers and foreign funds.

The BL 250 composite index was down by 5.8 per cent to 839.5 points from 891 points on Thursday. Technology index lost 9.6 per cent whereas the MNC index 2.3 per cent. Among the industry indices, NBFC's and Computer Hardware slumped by 11.2 per cent and 12 per cent respectively.

Hughes Software has lowered its 2001-02 growth forecasts. This could have led to the stock slide around 7.01 per cent to Rs 373.25. The corresponding trading volumes stood at 2.7 lakh shares.

Dr Reddy, after being in the limelight for quite some time, finally gave in and fell by 1.24 per cent to Rs 1,815.30 (Rs 1,838). The trading volumes surged from 4.6 lakh shares, the previous day to around 6.3 lakh shares. The stock has been bucking the trend in the broad general markets and rising for the past few days.

Gillette was another loser for the day. The stock price ended at Rs 238.30, down by 14.43 per cent. Volumes also surged to around four thousands from around nine hundred the previous day.

The other prominent losers on the Bombay Stock Exchange were Narmada Cements, Saw Pipes, Mukta Arts and Reliance Petroleum.

The number of gainers were very few in the Bombay Stock Exchange and the quantum of rise in these stocks was also less. Pfizer (I), a multinational pharma company inched up by 0.28 per cent to Rs 418.70. Trading volumes almost doubled to around four tho usand shares.

MRF, a tyre manufacturer, also edged up by 1.31 per cent to Rs 498.50. Nestle India has moved up by 1.16 per cent to Rs 518.75 (Rs 512.80).

TVS-Suzuki and Indian Aluminium also appeared in the gainers list. TVS-Suzuki increased by 2.84 per cent to Rs 81.60 (Rs 79.35). Around 15 thousand shares were exchanged during the day's trading.

Other gainers include Kodak India, Forbes Gokak, Geojit Securities and BSES.

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