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Weak start to week, mkts slump nearly 4 pct

February 2, 2009

The week started on a negative note today, as the Sensex dropped more than 350 points to close 3.8 pct down.

Investor sentiments have been hit yet again by weak U.S. data for the fourth quarter and a survey that showed Indian manufacturing activity fell for a third straight month in January.

Amongst Sensex components, shares in DLF, India’s top listed firm, took a beating as they slipped 13.5 pct. DLF reported a 69 percent slump in quarterly profit to 6.71 billion rupees on Saturday.

As the Satyam saga continues, the Economic Times reported that SEBI will consider a proposal from Satyam’s government-appointed board to set the open offer price over a shorter period, probably two weeks, instead of the usual six-month average.

The shares of the embattled outsourcer jumped over 6.5 pct in trade to close at 57.6 rupees. It remained the top traded stock on BSE and NSE today with total volumes of over 10 crores.

Sensex heavyweights like Reliance industries dropped 3.6 percent whereas ICICI Bank slipped 7.5 percent.

Sectorally, the realty index was worst hit as it ended with losses of 10.3 percent, followed by Metal Index that shed 5.3 percent.

A senior finance ministry official said that smaller state-run banks are expected to follow SBI and PNB in further cutting lending rates in days to come. Pranab Mukherjee who is holding the finance portfolio is Prime Minister Manmohan Singh’s absence, said the govt will focus on boosting domestic demand as the global downturn trips up growth in India.

Do you think banks should fast cut rates to improve credit flow in India’s slowing economy? Will this help improve overall investor sentiment?

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