Obama’s speech fails to boost investor confidence; Asian, European markets trade in red.

Major losers

Lower-than-expected Q3 numbers from HDFC and Wipro set stocks on the decline. Besides HDFC, Sterlite, Tata Power, ICICI Bank were among the other major losers in the Sensex pack

Our Bureau

Mumbai, Jan. 21

Weak global cues and disappointing third quarter results from Indian companies pushed domestic stocks down for the second straight day on Wednesday.

The 30-share Sensex slipped 3.53 per cent or 321 points to close below the 9,000-level at 8,779; the index had already shed 229 points on Tuesday.

The broader 50-share Nifty dropped 3.23 per cent to close at 2706.15.

The inaugural speech by the US President, Mr Barack Obama, failed to boost investor confidence regarding the financial stability of the economies worldwide, said marketmen.

The Nasdaq and S&P 500 closed down more than five per cent overnight on Tuesday (though rebounded marginally when they opened on Wednesday).

Asian and European markets were also trading in the red on Wednesday: the Nikkei and Hang Seng were down more than two per cent.

The FTSE and CAC were down more than one per cent in early trade.

“The markets had opened in the deep red on the back of weak cues from the US and Asian markets but got some support initially and climbed up from the lower level,” said Ms Anita Gandhi, Head of Institutional Business at Arihant Capital Markets.

But lower-than-expected third quarter numbers from index heavyweights HDFC and Wipro set stocks on the decline again. HDFC was one the worst performing stocks on Sensex on Wednesday.

It shed 7.49 per cent. Wipro dropped 3.55 per cent. Sterlite, Tata Power, ICICI Bank were among the other major losers in the Sensex pack, falling more than seven per cent each.

The market also apprehends weak results from RIL, due to a fall in international crude prices, which would drive down the refining margins of Reliance Industries, said Mr P.K. Agarwal, President Research, Bonanza Portfolio. RIL was down 5.33 per cent on Wednesday.

The bad third quarter results are taking a toll on the markets, he said.

There was some amount of panic selling during the final hours of trading due to the outcome of the SEBI Board meeting on Wednesday, said marketmen. SEBI made it mandatory for promoters to disclose details of shares pledged by them.

The BSE Metal, Power, Bankex and Oil & Gas indices were the worst performing sectoral indices. The market breadth was negative as 1,669 shares declined, while only 720 scrips advanced.

The selling on the part of FIIs that started since the Satyam episode, continued on Wednesday too. The net sale in equities amounted to Rs 786 crore. Domestic institutions were net buyers for Rs 282 crore.

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(This article was published in the Business Line print edition dated January 22, 2009)
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