Sensex near 3.5 yr closing low; Satyam up

The BSE benchmark Sensex on Monday dropped by over 165 points on profit-selling by funds.

Written by Reuters | Mumbai | Published:March 9, 2009 4:12 pm

Equities fell 2 per cent to their lowest close in almost three and a half years on Monday as deepening concerns about the health of the world economy sent markets reeling across Asia and Europe.

Energy group Reliance Industries and consumer goods firms ITC and Hindustan Unilever led the losses in light volume as investors were skittish ahead of market holidays on Tuesday and Wednesday.

Satyam Computer Services bucked the trend and rose after the fraud-tainted outsourcer kicked off a bidding process to sell a 51 per cent stake in the company.

The stock ended up 15.8 per cent at 48.75 rupees,after rallying 19 per cent during trade,on top of a 20 per cent jump on Friday. It topped the volumes for the second consecutive session with more than 35 million shares changing hands.

But financials and other IT-services firms dropped.

“There has been no let-up in selling. With visibility so low,most people prefer to sit on cash and hope for cheaper prices ahead,” Miten Mehta,fund manager at Bell Wether Capital,said.

The 30-share BSE index shed 1.99 per cent,or 165.42 points,to 8,160.40,its lowest close since Nov. 2,2005.

In comparison,Japan’s Nikkei average struck a 26-year low on Monday and other Asian markets slipped on worries about the fate of General Motors and US banks.

An early slide in European shares also weighed on investor sentiment,traders said.

The benchmark BSE index,which fell as much as 2.6 per cent during trade,has lost 15.4 per cent this year as increasingly risk-averse foreign funds pulled more than $2.2 billion from the market.

Twenty-seven of its components fell while in the broader market,losers led advances in the ratio of 2:1 on relatively light volume of 213.7 million shares.

Reliance Industries fell 1.4 per cent to 1,153.85 rupees,while state-run lender State Bank of India shed 4.7 per cent to 896.80 rupees and private-sector ICICI Bank dropped 2.4 per cent to 262.95 rupees.

Leading consumer-goods maker Hindustan Unilever and top cigarette maker ITC,which had held steady earlier this year,continued their decline from the previous week.

Hindustan Unilever shed 3.3 per cent to 216.50 rupees,while ITC fell 4 per cent to 158.20 rupees.

The 50-share NSE index closed down 1.8 per cent at 2,573.15.

Trading resumes on Thursday.

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