More negative disclosures,Q3 fears hit Dalal Street

Dalal Street fell another 3.15 per cent to its lowest close in more than five weeks on Monday as investors braced for tough quarterly earnings...

Written by Agencies | Mumbai | Published: January 13, 2009 1:36 am

Dalal Street fell another 3.15 per cent to its lowest close in more than five weeks on Monday as investors braced for tough quarterly earnings,more negative disclosures by companies and concerns about tighter regulations by the regulators.

The 30-share BSE Sensex dropped 296.42 points to 9,110.05,its lowest close since December 5. It briefly pared losses to 0.8 per cent after industrial output unexpectedly rose in November,but then fell 4.1 per cent before pulling back.

Ved Prakash Chaturvedi,managing director at Tata Mutual Fund,said the market was reacting to negative news in India and globally. “Funds,both domestic and foreign,are not buying and that is a cause for concern. People are also scared that corporate earnings may not be as good as previous quarters or maybe worse,” he said. Concerns that the Satyam scandal could trigger tighter regulations,also weighed on the market. Sebi has decided to set up a panel to review all records maintained by auditors on the quarterly results of companies which are part of the 30-Sensex and the 50-share S&P CNX Nifty.

Wipro shed 9.30 per cent to Rs 227.35 after the company said the World Bank had barred the company in June 2007 from direct contracts until 2011. Mid-sized software services firm Megasoft fell to an all-time low of Rs 13.80 after the World Bank said it had barred the firm for four years.

“People are apprehensive there might be more such disclosures and there are wild rumours doing the rounds,” said a dealer. However,scandal-scarred Satyam jumped 44.23 per cent to Rs 34.40 on hopes a newly constituted three-member board,appointed by the government,would help salvage the company’s clients and staff. Infosys Technologies,which announces quarterly results and gives its outlook on Tuesday,closed down 3.2 per cent at Rs 1,156.60. State Bank of India closed down 4.9 per cent at Rs 1,156.85 after its chairman said that bank had about Rs 500 crore exposure to Maytas Infra,in which the founders of Satyam have a stake.

Asian markets were weak today as a relentless global economic slowdown renewed investor caution about taking on risk. Key benchmark indices in Taiwan,Hong Kong,China,Singapore,South Korea were down by between 0.24 per cent and 2.83 per cent. US payrolls report for December 2008 showed more than half a million jobs were lost in the world’s biggest economy. The data also showed unemployment rate in the US was highest since 1993.

— With agencies

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