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| Markets begin week in red; metals, Reliance drag Sensex |
| BS Reporter / New Delhi Dec 08, 2009, 00:42 IST |
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Fears of rising interest rates in the US dampened investor sentiments on Monday. The Sensex dropped over 100 points, to end below 17,000 after four trading sessions.
The markets brushed off initial gains and slipped into the red within an hour of trade. Weakness in metal stocks kept the index in the red and the Sensex ended near the day’s low of 16,983.14, down 118.40 points (or 0.69 per cent). The NSE Nifty dropped 42.20 points to 5,066.70.
Strong jobs data in the US triggered worries that the Federal Reserve may raise interest rates. The Dow Jones added 0.22 per cent, to 10,388.90. The Nasdaq and the S&P 500 were up 0.98 per cent and 0.55 per cent, respectively. Further, the finance minister’s announcement that state-run banks will have to decide on mergers also dented the sentiments.
The BSE metal index showed weakness. The index dipped 3.29 per cent to 16,313.01, followed by realty (2.44 per cent) and oil & gas (1.97 per cent).
Market heavyweight, Reliance, was responsible for most of the fall. The stock dropped 3.07 per cent to Rs 1,055.65, as the bonus shares entered the market today. Reliance Communications slipped 1.7 per cent on reports of the company under-reporting revenues during 2006-07 and 2007-08.
Metal stocks slumped as prices fell on the London Metal Index on Friday. Sterlite shed 4.21 per cent, Tata Steel was down 3.38 per cent and Hindalco dropped 3.22 per cent.
“A weaker dollar has affected metal stocks and FIIs have also slowed on investment. FIIs turned sellers on Friday and may continue for the short term”, said Anita Gandhi, Head of Institutional Business at Arihant Capital.
Foreign Institutional Investors (FIIs) were net sellers worth Rs 191.50 crore and Domestic Institutional Investors (DIIs) sold shares worth Rs 185.25 crore.
On the other hand, Suzlon gained 4.73 per cent on bagging an order to deliver 70 wind turbines. The company’s German arm, REpower, has entered into an agreement for a 143.5 Mw project in the US.
PSU oil marketing companies such as Indian Oil and Hindustan Petroleum also gained as crude oil prices dropped nearly $1 a barrel. The JSW Energy IPO was subscribed fully within minutes of opening the issue today. IT stocks were up on a rising dollar.
The market breadth was negative, with 1,461 shares declining, while 1,317 advanced. A total of 2,862 shares were traded on the Bombay Stock Exchange today.
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