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| Sensex dips for 2nd day, loses 115 pts |
| Bloomberg / Sep 02, 2009, 00:52 IST |
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Plan panel cutting growth target, buzz on selling by investors trigger the fall.
The Bombay Stock Exchange (BSE) Sensitive Index, or Sensex, today fell 115 points on speculation that investors stepped up sales on concern that India’s economic growth might falter on lower farm output caused by a weak monsoon.
Mahindra & Mahindra, the nation’s biggest tractor maker, lost 2 per cent, the most in almost two weeks, while HDFC Bank, the third-biggest lender, retreated 1.7 per cent. India’s annual economic growth may average 7.8 per cent in the five years through March 2012, less than the targeted 9 per cent, because of a drought, the government’s Planning Commission said today in New Delhi.
“Basket selling by some overseas funds is taking place,” said Kishor Ostwal, managing director of CNI Research (India) in Mumbai, a publicly traded equities research provider.
The Sensex fell 115.45 points, or 0.7 per cent, to 15,551.19, erasing gains of as much as 1.6 per cent. The S&P CNX Nifty Index on the National Stock Exchange declined 0.8 per cent to 4,625.35. The BSE 200 Index decreased 1 per cent to 1,911.72.
Mahindra & Mahindra declined to Rs 846.80. HDFC Bank dropped to Rs 1,446.10, the lowest level since August 18. Reliance Industries, India’s most valuable company, lost 1.2 per cent to Rs 1,980.85, Housing Development Finance Corp the biggest mortgage lender, slid 2.4 per cent to Rs 2,413.90.
Economic growth
Government today cut the nation’s growth target for the five-year period to March 2012 at a meeting of policy advisers. The nation is also less likely to reap the benefits of a global recovery as trade accounts for just a third of the $1.2 trillion economy. It has declared drought or drought-like conditions in almost half the country.
“Growth rates may turn worse in the current and next quarter because of the impact of the drought,” said Montek Singh Ahluwalia, deputy chairman of the Commission. He said the fiscal fourth quarter ending March 31 will be stronger.
“The drought is the concern in the short term, but the markets are likely to go higher over the long term,” said Mahesh Patil, co-head of equities who helps manage $2 billion at Birla Sun Life Mutual Fund in Mumbai.
India’s economic rebound, which last quarter lagged behind recoveries in China and Japan, may falter as a drought threatens to curb harvests and rural incomes. Growth in Asia’s third-largest economy may slow to 5.9 per cent this quarter from the 6.1 per cent expansion in the previous three months reported Monday.
Record high
Maruti Suzuki India, maker of half the cars sold in the country, soared to a record after August sales gained the most in in last 30 months.
Maruti rose 7.1 per cent to Rs 1,540.45, the highest level since the shares began trading in July 2003. The stock has nearly tripled so far this year.
Vehicle sales surged 42 per cent last month as easier availability of credit and economic growth in India boosted demand for the Ritz and Wagon-R hatchbacks. The New Delhi-based unit of Suzuki Motor Corp is considering more investments to expand capacity to meet rising local demand and exports.
Overseas funds purchased a net Rs 1,090 crore of Indian stocks on August 28, the Securities and Exchange Board of India said on its website. The funds have bought Rs 40,300 crore of stocks this year to date, compared with record net sales of Rs 53,000 crore for the whole of 2008.
Britannia Industries climbed 1.1 per cent to Rs 1,682.35. The cookie maker climbed the most in more than eight months after the BusinessLine reported it had bought out partners in ventures in Dubai and Oman, citing Managing Director Vinita Bali.
Strides Arcolab, an Indian company that makes injectible medicines, gained 2.4 per cent to Rs 153.1 after saying it got an order to provide oseltamivir capsules to the Indian government.
Gujarat Flourochemicals added 8.6 per cent to Rs 162.3. Moneycontrol.com reported today that the Panchmahal, Gujarat-based firm got carbon credits worth Rs 240 crore, without citing anyone.
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