Markets extend losses

Written by Markets Bureau | Mumbai | Updated: Jan 11 2009, 03:21am hrs
The markets continued to slide on Friday as weak global cues and the Satyam scandal weighed on investor sentiments. Share prices witnessed wild swings during the trade before ending lower than the previous close. Amid high volatility, the Sensex on Friday declined 1.9% to 9,406.47 points, extending the weeks loss to 5.5%. Easing inflationary pressures helped the markets pare part of early losses even as Satyam Computer Services, which is facing investigation for falsifying its books, led the stock to plunge with a 41% drop. Larsen & Toubro also lost 7% as the value of its 3.95% stake in Satyam deflated.

On the National Stock Exchange (NSE), the S&P CNX Nifty Index lost 1.6% to 2,873 points while the Nifty futures for January eroded 1.8% to 2,861.05. Weak global cues as well as the scandal surrounding Satyam weighed on the Indian markets, leading to high level of volatility. The Volatility Index (Vix) ended 7.8% higher at 47.82. The foreign institutional investors (FIIs) were net sellers to the tune of Rs 1,058.4 crore as on January 9, according to data by the Securities and Exchange Board of India (Sebi).

Satyam Computer stock closed at Rs 23.75, losing 41% after interim CEO Ram Mynampati expressed concerns over the liquidity position of the company the previous day. Satyam Computer shares hit an all-time low of Rs 11.50 on the Bombay Stock Exchange (BSE), and Rs 6.30 on the NSE. The stocks of other software majors such as Tata Consultancy Services Ltd increased on expectation that Satyam's clientele will switch over to rivals. Infosys Technologies and Wipro also gained. DLF, Reliance Communications, Tata Steel, and Ranbaxy were among the prominent losers.

Asian indices, except the Shanghai Composite, declined on Friday. European markets were also gloomy in early trade. The overall market breadth was negative with 1,879 losers pitted against and 577 gainers on the BSE. The volume of trade plunged to Rs 4,207.30 crore from Rs 5,831.85 crore on Wednesday. Among the sectoral indices, the BSE Metals dropped 7.16% and BSE realty 5.15%. The smallcap index also fell 2.92% at 3,555.60.

Meanwhile, as increased foreign direct investments enriched the dollar supply, the rupee gained 1% to 48.29 on Friday.