Indian Market Extends Losses
The Indian market extended its recent losses on Friday, after the Central Bureau of Investigation (CBI) said it was probing 21 companies on the bribes-for-loans scandal and market regulator SEBI said it is examining the possibility of insider trading in shares of at least nine companies. Weak Asian and European markets and a lack of directional cues from Wall Street due to the Thanksgiving holiday on Thursday also dampened investor sentiment to some extent.
Meanwhile, a finance ministry statement termed the housing finance racket, involving several officials of public sector banks, as an "isolated" instance of "alleged illegal gratification." The finance minister has directed all state-run banks, financial institutions and insurance companies to look into their exposures to the various companies mentioned in the CBI application filed in the Court and carry out independent evaluation on the asset quality, documentation and compliance of other prudential requirements.
With an intra-day recovery proving elusive, the 30-share BSE Sensex ended down 182 points or 0.94% at 19,137 after falling to a low of 18,955 earlier in the session. The broader Nifty lost 48 points or 0.82% to end at 5,752.
Shares of mid and small companies tumbled on the back of panic selling triggered by margin calls from stock brokers. The BSE mid-cap and small-cap indexes ended down 3.06% and 4.49%, respectively. In the broader market, declining shares outpaced gaining ones by 2508 to 485 shares.
Sector-wise, property stocks bore the brunt of the selling on concerns about a pullback in lending to the realty sector. Ackruti City (down 13.38%), Orbit Corp (down 13.08%), Indiabulls Real Estate (down 11.88%), D B Realty (down 9.99%), Unitech (down 4.76%), and DLF (down 1.71%) were the prominent decliners.
Hindustan Construction plummeted 19% after the environment ministry reportedly asked its subsidiary Lavasa Corp to stop construction of a township project outside Pune.
Airline stocks such as Kingfisher and Jet Airways fell about 7% each after civil aviation minister Praful Patel asked airlines to avoid any kind of predatory pricing. Bank of India rose 2.14% after the state-run lender clarified that its asset quality continues to be good. Piramal Healthcare, which is in the race to acquire Ahmedabad-based Paras Pharmaceuticals, ended up 2.04%.
Jaiprakash Power Ventures tumbled 4.25% after receiving a CBI notice on the ongoing probe into the multi-crore housing loan scam. Jaiprakash Associates plunged a little over 8%. Alphageo (India) declined 3.54% despite winning a new order worth Rs.12 crore from Essar Oil.
Heavyweight Reliance Industries fell nearly 2% to end near the day's low. TCS rose 2.14%, whileInfosys eased 0.76%, as the rupee fell to a 10-week low against the dollar on Friday afternoon, tracking losses in other Asian peers and the local stock market. Wipro, which is reportedly trying hard to reinvigorate itself, ended down 0.55%.
In the banking sector, Union Bank of India, Bank of Baroda, HDFC Bank, Axis Bank, Punjab National Bank and IDBI Bank lost between 0.5% and 5%, while SBI advanced 1.16% and ICICI Bankadded 0.68%.
Among metal stocks, Tata Steel, Hindalco, Sterlite, Hindustan Zinc, Sesa Goa and JSW Steel fell by 0.80%-7%. Telecom operator Reliance Communication fell 5.51%, auto maker Tata Motorsdeclined 3.30%, Mahindra & Mahindra fell 3% and mortgage lender HDFC ended down 1.78%.