Money on the markets
A maturing market amid the mayhem
Shares in Mahindra Satyam dropped nearly 11 percent on Wednesday after a media report said the Central Bureau of Investigation had found evidence of an additional 4,739 crore rupees corporate fraud at the IT services firm.
The stock closed at 90.55 rupees, its lowest in over four months. It had closed at 123.25 rupees on September 1, its highest closing point since January 7.
Mahindra Satyam fell on high volumes of over 33 million shares on the BSE and ended as the second-most traded counter.
However, at the Reuters India Investment Summit, a top company executive said customer attrition has stopped and the company was not offering price cuts to win new deals.
The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance’s stock nearly 4 percent on Monday.
If only James Tobin had lived to see this day. The American economist was not only a big fan of government intervention in matters economic and financial, which this credit crisis has seen plenty of, but he was also the man behind the ‘Tobin tax’ that Brazil has just introduced on foreign exchange transactions.
James Tobin believed a small tax on speculative transactions was acceptable and a reasonable means for third world countries to garner some revenues out of foreigners who wanted to dabble in their markets.
It doesn’t stop with Brazil. Indonesia hasn’t introduced a Tobin tax, but is trying to close a loophole through which corporates borrowing through special purpose vehicles could evade local taxes. Both Taiwan and Indonesia have also targeted short-term foreign investments — Taiwan has banned foreign investment in time deposits while Indonesia is thinking of banning overseas investors from central bank bills.
Bharti Airtel was also the top Sensex loser. Smaller competitor Idea Cellular closed 2.85 percent lower.
RIL shares had fallen more than 3 percent over the last three days in the absence of any major announcement at the company’s annual general meeting earlier this week.
Indiabulls Real Estate, HDIL and Unitech slipped over 5 percent each and ended as the top losers in the index. Phoenix Mills was the only counter on the index that closed in the green.
Top IT stocks Infosys, Wipro and TCS touched their 1-year highs as the BSE IT index closed 0.7 percent higher.
Top IT firms Infosys Technologies and TCS were among the top Sensex losers, falling 0.83 percent and 0.63 percent respectively. Patni Computer dropped over 3 percent.
Hero Honda and Maruti Suzuki rose 4 percent each in trade, ending as the top gainers among the Sensex components. Exide Industries surged 8.6 percent.