Northern, WI 9/19/2011 (PennyPayDay) – The Indian markets fell sharply on Monday, pressured by weak global cues, on concerns that Greece's sovereign debt crisis could turn into a full-blown financial crisis after a weekend of high-level meetings failed to make any progress. A fall in rupee value versus the dollar and concerns that there could be further rate hikes also weighed on investor sentiment.Snapping three days of gains, the benchmark 30-share Sensex ended down 188 points or 1.11 percent at 16,745, while the broader Nifty index on the NSE fell by 52 points or 1.03 percent to 5,032. Mid-cap stocks posted relatively modest losses while small-caps were largely unchanged.
State-run lender SBI lost 1.5 percent and private sector rival ICICI Bank shed 2.4 percent after the Reserve Bank of India raised its key lending rates by quarter of a percent point last Friday and reiterated its anti-inflationary stance, even at the cost of sacrificing some near-term growth. Mortgage lender HDFC ended down 1.1 percent.
Axis Bank fell 2.2 percent after the private sector bank said its board approved a revised two-stage deal to acquire the investment banking and broking units of Enam Securities.
Among other rate-sensitive stocks, property developer DLF fell 2.1 percent, automaker Bajaj Auto shed 1.5 percent and Tata Motors edged down 0.2 percent, while Maruti Suzuki climbed 3.1 percent after reports claimed the carmaker has resumed production at both Manesar and Gurgaon plants on Sunday. Mahindra & Mahindra closed up 0.3 percent and HeroMoto gained 0.4 percent.
Larsen & Toubro tumbled 3 percent despite making an announcement that it won orders worth Rs 1,015 crore in the building and factories segment in the second quarter. Sun Pharma lost 2.6 percent even as the company said it resolved regulatory issues at its Cranbury plant in the United States. Copper producer Sterlite lost 3.5 percent, state-run oil explorer ONGC fell 2 percent and power producer NTPC declined 1.7 percent. Heavyweight Reliance Industries fell 0.8 percent, extending declines for a second consecutive session.
Tata Consultancy Services closed down 1.1 percent. The IT firm today said it has bagged a multi-million dollar contract from Deutsche Bank to provide software solutions to the financial services firm's capital markets business unit across seven countries. Infosys lost 1.33 percent, while Wipro posted a modest half a percent gain.
Fortis Healthcare fell 1.9 percent on receiving board approval to buy Singapore-based Fortis International Pte., a leading integrated healthcare delivery company. GVK Power closed down 0.6 percent after the company said it would pay $1.26 billion dollars to buy a majority stake in coal assets owned by Australia's Hancock Group. Dhanlaxmi Bank eased 0.7 percent after the private sector lender hiked its lending rates.
Alfa Laval climbed almost 20 percent ahead of a board meet today to consider delisting. Everonn climbed 5 percent, extending gains for a fifth day, after plunging over the arrest of its MD P Kishore on bribery charges. Jyoti Structures, PSL and Kavveri Telecom Products rose 1-5 percent on winning new orders.
On the global front, the other Asian markets fell between 0.13 percent and 2.8 percent on Monday, with shares in Hong Kong pacing the declines, after a meeting of European policy makers over the weekend in Poland failed to come up with concrete measures to stem the region's debt crisis. China's Shanghai Composite index fell 1.8 percent to a 14-month low, dragged down by cyclical stocks in thin trading on fears over a fresh liquidity squeeze ahead of Sinohydro Group's $2.7 billion initial public offering to be launched this week. The Japanese markets were closed for a public holiday.
The euro fell sharply against the dollar, the major European averages were down 2-3 percent in early trading and the U.S. stock futures pointed to an extremely weak opening on Wall Street after Europe's finance ministers warned Greece that further aid will be kept on hold unless it meets its budget targets. Bank stocks led the losses in Europe after Swiss bank UBS today raised its rogue trading loss to $2.3 billion from $2 billion.
Commodities retreated, while safe-haven gold and the dollar advanced as fresh concerns about the eurozone sovereign debt crisis curbed investor appetite for riskier assets.
Greece should not be the "scapegoat" for the debt crisis in the eurozone, the country's Finance Minister, Evangelos Venizelos, said hours before he was to hold an emergency teleconference with eurozone and IMF officials to decide whether the Greek government is on track to meet the conditions for urgently needed rescue funds.
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