Business | Markets
Sensex down 1.3% after credit woes rattle markets
Indian shares fell 1.3 per cent yesterday after credit woes rattled markets across the globe, but the exit of communist allies of the government helped shore up sentiment on hopes the move would help push reforms.
- Reuters
- Published: 00:07 July 9, 2008
New Delhi: Indian shares fell 1.3 per cent yesterday after credit woes rattled markets across the globe, but the exit of communist allies of the government helped shore up sentiment on hopes the move would help push reforms.
Shares in state-run firms rose on expectation the government would pursue privatisation. Leading lender State Bank of India reversed early falls to close 2.8 per cent higher at Rs1,204.45.
State-run power producer NTPC raced 3.6 per cent to Rs161.20. The public sector firms index gained 0.82 per cent.
The Left parties that have stalled the government's privatisation reform for four years said yesterday they were withdrawing their support to protest against a civilian nuclear deal with the United States and would ask the president to call a vote of confidence.
The move was expected and no immediate threat was seen to the government, which had secured support from a regional party.
Abheek Barua, chief economist at HDFC Bank, said he expected the government to push privatisation and pension reforms, higher foreign limits in insurance and more liberal norms for foreign banks, all of which had been stalled by the Left parties.
The benchmark BSE 30-share index closed 176.34 points lower at 13,349.65, with 10 components gaining. It had fallen as much as 3.5 per cent in the morning before the Left parties pulled out.
The index had fallen for seven weeks in a row until last Friday, the longest stretch of weekly losses in seven years, losing 23 per cent. It is down more than 34 per cent on the year.
Reliance Industries fell 2.4 per cent to Rs1,978.60, extending the previous session's decline on reports the refiner may have to pay higher taxes to help the government subsidise retail fuel prices.
Mobile operator Reliance Communications, whose exclusive tie-up talks with South Africa's was to end yesterday, closed down 1.1 per cent at Rs415.40, extending Monday's 4.2 per cent fall.
A deal looks unlikely to be announced on Tuesday as its dispute with Reliance Industries is yet to be resolved. Analysts and media reports have said the deadline could be extended.
In the broader market, 1,420 losers were ahead of 1,156 gainers on volume of 286.1 million shares.
The 50-share NSE index fell 1.03 per cent to 3,988.55.
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