A maturing market amid the mayhem
Sensex snaps two-day rise
The benchmark index shrugged off lower-than-expected inflation figures and fell 1.21 percent on Thursday, as a slump in domestic demand and fresh concerns over the U.S. economy took a toll on investor sentiment.
The Sensex closed 110.97 points down at 9,090.88, snapping a two-day rise. Losses were led by Reliance Industries, which fell 1.6 percent to 1286.75, and HDFC which dropped 3.6 percent.
Many banks fell as talks of more rate cuts by the RBI were seen as hurting profit margins. Top lender SBI shed 0.3 percent, HDFC Bank fell 1.4 percent, while ICICI Bank reversed early losses to end 0.4 percent up.
The Autos Index saw most of the selling pressure as it ended 1.98 percent down. Many automobile companies are facing falling sales as consumers are now spending less. TVS Motor, Tata Motors, Maruti Suzuki, Mahindra & Mahindra were down in the range 2 percent to 5 percent. Tata Motors slipped 2.8 pct, after falling as much as 5.3 percent during trade, on reports that payments to vendors would be delayed.
Embattled outsourcer Satyam Computer Services continued its fall, closing down 7.6 pct at 46.25 rupees. The scrip has registered drops this week despite positive news. After market hours, the new Satyam board announced that A.S. Murthy would be the new CEO.
Shipping firms however bucked the trend, picking up steam on signs of revival in demand for freight for commodities. SCI climbed 0.7 percent and Mercator Lines jumped 23 percent.
Markets are likely to see more pressure in the coming days as the global slowdown hits demand for Indian goods. Plan panel deputy chairman Montek Singh Ahluwalia today said there was need for steps to help garment exporters who have been hit by the downturn. Job losses in this sector, according to the garment exporters lobby, is estimated to touch 1.5 million by March-end. Do you think relief measures for this sector and another round of rate cuts by the Reserve Bank of India (RBI), which is being speculated, will help the index cap its losses?