The benchmark equity indices, Sensex of the Bombay Stock Exchange (BSE) and S&P CNX Nifty of the National Stock Exchange (NSE) fell 3.79 and 3.76 per cent respectively on the back of sharp decline in banking and realty stocks. Sensex closed the day at 9,066 down 357 points and Nifty ended the day at 2,766 down 108 points.
Country’s top real-estate developer DLF fell 13.54 per cent at Rs 153. Investors were spooked by news reports of income-tax department ordering a special audit of DLF accounts for alleged discrepancies and suspicion of company trying to lower its tax liability by understating the sales for 2005-06.
Among other losers Jaiprakash Associates was down 13.70 per cent at Rs 65. Reliance Infra fell 10.5 per cent at Rs 521. ICICI Bank was down 7.54 per cent at Rs 384 and shares of Housing Development and Finance Company declined by 7.37 per cent to close at Rs 1,423.
“Investors sentiment towards realty stocks is negative. There is a belief that what happened to Unitech a couple of months back, wherein the company’s projects got cancelled, is now spreading to other big property developers too as they are cash strapped.
Moreover, top institutions believe that bank lending to big projects would see a virtual freeze before elections,” said Deepak Sawhney, head of research at Mumbai-based Networth Stock Broking. The mid and small-cap stocks index on BSE fell over 1.5 per cent each.
The BSE Realty Index was down 10.32 per cent. BSE Metal index fell 5.34 per cent and BSE Bankex fell 5.11 per cent. Domestic banking stocks were also impacted after international credit rating agency Moody’s downgraded its rating from stable to negative in Indian banks last week.
Metal stocks fell on worries after weak results posted by the metal firms on fall in demand. Tata Steel, Hindalco Industries, Sterlite Industries, Steel Authority of India, National Aluminum Company fell between 4-7 per cent.
The market breadth was poor as 62.41 per cent or 1,577 stocks declined against the advances of 34.31 per cent or 867 stocks.
India’s exports fell an annual 1.1 per cent in December 2008 to $12.69 billion, government data showed on Monday, a third straight loss as the global slowdown cuts demand for Indian goods.
The trade deficit narrowed to $7.57 billion in December 2008 compared with $10.07 billion in November 2008, due to a sharp drop in the cost of oil imports.
Imports were up an annual 8.8 per cent at $20.26 billion in December 2008, while oil imports fell 30.9 per cent during the month from a year earlier to $4.71 billion.
