Agencies
Mumbai, Mar 17:
India`s main share index extended losses to more than 6 percent by Monday afternoon, joining a global equities rout on growing fears of financial trouble after a fire sale of Bear Stearns and the US Fed cut its discount rate.
Index heavyweights ICICI Bank and Reliance Industries led the losses. The 30-share benchmark sensex BSE index was down 6.03 percent, or 951.03 points, and closed at 14,809.49, with all its components falling. The broader 50-share NSE index fell 5.11 percent to 4,503.10 points.
Second-largest lender ICICI Bank fell 6.5 percent, and largest listed firm Reliance Industries was down 3.5 percent.
These two stocks constitute almost a quarter of the main index.
"It`s a kind of forced selling amid the turbulence in the global markets," said DD Sharma, vice president at Anand Rathi Securities in Mumbai.
"The worsening conditions of the financial system in the world is having a very bad impact on the Indian markets." In an unexpected emergency step before the markets opened in Asia, the US Federal Reserve lowered the discount rate it charges on direct loans to banks and announced a new programme to lend directly to other big financial firms.
And JPMorgan Chase & Co said it would buy stricken US investment bank Bear Stearns for just USD 2 a share, though the lender said the deal-related costs of the purchase would total USD 6 billion.
Banks and financial shares were the worst hit, with mortgage lender Housing Development Finance Corp falling 8.9 percent to 2,280 rupees, and top lender State Bank of India losing 4.1 percent to 1,605 rupees.
"There will be some more pain in the short term. But it`s not a bad time to start venturing into the market with long-term perspective," said Sanjeev Patkar of Dolat Capital.
Amidst tumbling of share prices of many blue-chip companies, share prices of few companies touched a new high on Monday.
SpiceJet Ltd touched a high of 54.50 rupees after 9.7 million shares, or 4 percent of its equity, changed hands in a block deal on the BSE at 49.25 rupees a share. The share were later trading up 1.9 percent at 52.10 rupees.
Usha Martin touched a high of 77 rupees after about 5.97 million shares, or 2.4 percent of the company`s equity, exchanged hands in a block deal at 67.40 rupees a share on the NSE. The shares later pared gains to trade 0.6 percent up at 71.95 rupees.
Megasoft Ltd touched 84 rupees after a block deal of 1.75 million shares, or 3.96 percent of the company`s equity, at 78 rupees a shares on the NSE. The shares were up 3.7 percent at 82.10 rupees.
Rupee drops to 6-month lows
The rupee slipped in early deals on Monday to more than six-month lows as losses in Asian stock markets fuelled concerns of capital outflows.
At 9:15 a.m., the partially convertible rupee was trading at 40.77/78 per dollar -- a level it last tested in early September, weaker than Friday's close of 40.435/445.
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