Business | Markets
Sensex slips 2.12% as sentiment sours again
Indian shares fell 2.12 per cent on Thursday, led lower by infrastructure play Larsen & Toubro as renewed worries about the health of global banks hit the market's fragile confidence.
- Reuters
- Published: 00:04 January 25, 2008
Mumbai: Indian shares fell 2.12 per cent on Thursday, led lower by infrastructure play Larsen & Toubro as renewed worries about the health of global banks hit the market's fragile confidence.
French bank Societe Generale said fraud by a single trader had caused it a $7.1 billion loss and that would seek emergency funds as a result.
"Bad news from overseas banks is coming out continuously. Today's SocGen fraud has added to it and hit sentiment," said Daljit Kohli, head of research at Emkay Share and Stock Brokers Ltd.
"Everybody has started recognising that the U.S. is in a deep problem and this is percolating down to other markets as well," he said.
Shares in top private bank ICICI Bank ended down 1.6 per cent at Rs1,132.80, having been up as much as 8.3 per cent after managing director KV Kamath said the bank planned to raise up to $1 billion in a pre-IPO placement of ICICI Securities, its investment banking and broking arm.
Smaller private bank HDFC Bank fell 1.8 per cent to Rs1,507.20. The sector index lost 1.4 per cent.
The benchmark BSE 30-share index fell 372.3 points to 17,221.74, with 24 components in the red. The index closed almost 19 per cent below a life high of 21,206.77 hit on January 10.
In morning trade, hopes of a cut in local interest rates next week and gains in stock markets around the word since since the US Federal Reserve slashed interest rates by 75 basis points on Tuesday saw the index rise as much as 3.4 per cent.
The index had jumped 5.2 per cent on Wednesday to snap a seven-day losing run that had culminated in a vicious sell-off on Monday and Tuesday, when the market posted intra-day falls of more than 10 per cent.
Overseas funds
Overseas funds, which bought a record $17.4 billion of stocks in 2007, sold $2.6 billion worth of Indian shares in the five trading days to Tuesday.
Shares in Reliance Industries, India's most-valuable listed firm, and Larsen & Toubro fell on heavy foreign fund selling, two dealers said.
Reliance Industries fell 2.5 per cent to Rs2,490.55, and L&T dropped 5.6 per cent to Rs3,538.35. Reliance, ICICI Bank and L&T together account for more than 34 per cent of the main index.
In the broader market 2,345 losers lead 380 gainers on volume of 350 million shares, which was lower than recent volumes.
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