The Bombay Stock Exchange’s Sensitive Index hit a three-week low on concern that the government’s plan to borrow record amounts this financial year would drive up interest rates and funding costs at companies.
ICICI Bank, the nation’s second-largest lender, dropped 5.7 per cent. DLF, India’s largest developer, sank 5.4 per cent, extending yesterday’s decline after the budget presentation omitted any new measures to revive housing demand.
The Sensex retreated 270.45 points, or 2.9 per cent, to 9,035, its lowest since January 27. The S&P CNX Nifty Index on the National Stock Exchange declined 2.7 per cent to 2,770.50. The BSE 200 Index slid 2.8 per cent to 1,065.78. S&P CNX Nifty futures for February delivery dropped 2.5 per cent to 2,761.
In just two trading sessions, realty stocks have shed nearly 10 per cent of their value as the Interim Budget failed to meet expectations of the sector and promoters of mnay firms disclosed they pledged higher number of shares to secure loans.
BSE Realty Index gained nearly 13 per cent last week on hopes that the government would come up with some incentives such as a two percentage cut in home loan rates to 6-6.5 per cent and priority lending status for loans upto Rs 35 lakh from Rs 20 lakh earlier. Reflecting the poor state of property market in the recent times, BSE Realty Index fell as much as 36 per cent from the beginning of 2009 when the broad-based Sensex fell only 6 per cent.
ICICI fell 5.7 per cent to Rs 385.70. State Bank of India, the country’s largest lender, slid 3.4 per cent to Rs 1,098.80. DLF dropped 5.4 per cent to Rs 148.25, adding to yesterday’s 2.4 per cent decline. DLF had its price target cut by 39 per cent to Rs 124 a share at Goldman Sachs Group. Developer Unitech slid 6.3 per cent to Rs 28.30, extending yesterday’s 5 per cent fall.
Overseas investors bought a net Rs 20 crore ($4.1 million) of Indian stocks on February 13, according to the nation’s market regulator.
Hexaware Technologies added 7.5 per cent to Rs 31.40. The best performer on the Bombay Stock Exchange 500 Index gained after returning to profit in its fourth quarter. Net income was Rs 17.1 crore in the three months ended December 31, compared with a loss of Rs 81 crore a year earlier because of a one-time expense of Rs 103 crore related to foreign currency transactions, the company said yesterday in a statement. Revenue rose 18 per cent to Rs 306 crore.
Hindalco Industries fell 4.3 per cent to Rs 42.40. India’s biggest aluminum producer dipped into its Rs 8,600 crore share-premium account to write off costs incurred to buy Novelis and add capacity in the country.
Mro-Tek jumped 19 per cent to Rs 28.05. The Indian distributor of communication equipment said yesterday its board will consider a plan to buy back the company’s shares. The board will meet on February 25 to consider the plan.
