Indian stock Market tanks on likely US hedge funds redemption
Sanjay Jha | September 29, 2008 at 01:58 amby
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Despite the bailout plan approved by US Congress, Indian stock market tanked due the negetive sentiments in other world markets.Since morning Asia and Europe markest have been slipping.
The concomitant impact of huge selling in European markets such as FTSE, CAC and DAX, falling more than 3 per cent, has seen a dip back home in realty, bank, IT and capital goods stocks.
Sectors like power, metal, pharma, auto and oil & gas saw a huge selling pressure and dropped more than 5 per cent, with an exception of realty, which was down more than 10 per cent.
Reports are doing rounds that US-based hedge funds are going for redemption within a span of 90 days and this announcement has pulled the market to a large extent.
Hindustan Unilever was the lone gainer, up 0.32 per cent at Rs 253.30, at 2:49 pm.
Experts believe that even with funds becoming dearer and dearer, the possibility of FMCG companies being affected is quite less as most are cash-rich and have positive cash flow. Also, the defensive nature of the sector works well in a bearish period.
The same principle goes for the healthcare sector, with Cipla gaining 1.02 per cent.
Market talk has it that domestic funds are buying largely in defensive sector stocks.
BSE Realty fell over 9 per cent. Bankex lost 6.5 per cent, IT, TECK, Capital Goods, Metal and Power indices tumbled 3.5-4.5 per cent. Midcap and Small Cap indices fell nearly 5 per cent each. Unitech lost 9.37 per cent to Rs 100.65 and is trading with volumes of 5.12 million shares.
The stock tumbled 84 per cent from its 52-week high of Rs 623. ICICI Bank fell below Rs 500. Currently, it lost 11.31 per cent to Rs 497. It is trading with volumes of 10.04 million shares. The stock fell 65 per cent from its 52-week high of Rs 1,455. Top losers on the Sensex are ICICI Bank at Rs 507.70, down 9.54 per cent, DLF at Rs 342.40 down 7.33 per cent and Satyam at Rs 299.60 down 6.94 per cent.
The auto index, with the sector going through a rough patch on rising input costs thanks to inflation, has seen a drop of close 4 per cent. However, with the announcement of few launches and capacity addition at the Haridwar plant which will get tax break in terms of excise duty, sales tax and income tax, Hero Honda, gained 1.19 per cent to Rs 855. Experts believe larger volumes, better margins and lower tax rates would be growth-drivers for the company.