Sensex at 8-yr low
Mumbai: The Indian financial markets plummeted to an 8-year low on account of massive selling by foreign funds.

The BSE Sensex closed the day at 2,688 (down 142 points), the NSE Nifty at 874 (down 49 points) and the rupee traded at its historic low of Rs 48.40/45 to a dollar.

Some sporadic buying interest in a few select counters like Nestle and Bajaj Auto following news that the government might increase the FII limit, led to a mild recovery by about 50 points from the days low of 2,644-level.

The large scale selling by foreign funds had earlier led to the Sensex plunging to 2,644 -- its lowest level since November 1993. The stock market crash is a direct consequence of apprehensions that an US retaliatory attacks on Afghanistan would raise tensions in the region.

A wave of selling by foreign funds has dragged the benchmark index down by more than 16 per cent in the four trading sessions since last Tuesday's attacks on the US.

The rupee, meanwhile, dropped to a new lifetime low on Monday morning driven by sustained dollar demand from foreign funds and importers. Rupee breached the 48-mark for the first time ever and was currently trading at 48.40/45 per dollar.

Shares of software companies, which rely on the US for about 60 per cent of their revenues, were the worst hit. Infosys, NIIT, Satyam - all fell by more than nine per cent.
Back to News Review index page  

Stock futures may start in 6 weeks: SEBI
Mumbai: Futures trading in individual stocks could start on Indian bourses in the next six weeks, the country's market regulator, Securities and Exchange Board of India (SEBI) said in a statement after an expert group meeting on Monday.

SEBIs advisory group on derivatives recommended that all stock futures contracts initially be settled only in cash, and that settlement by delivery be introduced after three to four months.

The expert panel also discussed the possibility of introducing margin trading, although it said that more time was needed for its actual launch.

The introduction of margin trading is expected to partly make up for a fall in liquidity trigged by a ban of the century-old carry-forward system, which allowed investors to roll over positions by paying a margin.
Back to News Review index page  

Software cos may opt to buyback stock
Mumbai: Many Software companies are considering buying back their own stock as their market capitalization has sunk below their cash reserves following plummeting of their stocks in the aftermath of the terrorist attacks on the US.

Technology companies that feel their valuations are higher than the current market price would find it profitable to buy back their own stock, according to a market analyst.

The stocks of many a software companies have plunged to an all time low on account of panic selling though they have a sound business model and a good prospect.

Take the case of Global Tele-systems whose market capitalization stood at Rs 350 crore following a crash in their stock price though its reserves are over Rs 500 crore.

Similarly, Aptech Ltd too has reserves of more than Rs 250 crore while its market cap is down to Rs 102 crore. Companies like Pentamedia Graphics, Sonata Software, Aztec and Mascot too have favourable market cap-to-reserves ratios.
Back to News Review index page  

Ordinance on buyback at short notice
New Delhi: The government is expected to issue an ordinance to allow companies to buy back its equity at a short notice without going through the normal procedures of obtaining shareholders' prior consent.

The ordinance is expected to provide this special facility to Indian companies only for a limited period. This is to encourage the companies sitting on idle cash reserves to use them for buying back their equity and increase trading in the stock markets.

The government move is aimed at reviving stock market sentiment, which has been badly hit after the recent US developments.

With the proposed ordinance doing away with the requirement of obtaining prior consent of the shareholders for a limited period, more companies are expected to enter the capital market for buying back their shares.

Infotech companies and several other blue chip companies could take advantage of the ordinance and utilise their cash reserves to enhance their control over the companies.

At the same time, shareholders of these companies would see in this an opportunity to sell their shares at a profit.

The government also proposes to raise the ceiling of five per cent of equity purchase by promoters of Indian companies during a year through the acquisition route.

Similarly, an increase in the 49 per cent ceiling on investment in Indian companies by foreign institutional investors and the introduction of margin trading on the stock exchanges are among the other proposals being actively finalised by the government to boost market sentiments.
Back to News Review index page  

Indian scrips on Nasdaq, NYSE touch new lows
Mumbai: American Depository Shares (ADS) of all Indian companies, except Dr Reddys Laboratories, touched all-time intra-day low after Nasdaq and the New York Stock Exchange reopened today.

The Nasdaq has been closed since last Tuesday when terrorists struck New York and Washington.

Eleven Indian companies are listed in the United States. Of the 11 ADRs listed abroad, three are listed at Nasdaq while eight others are listed on the New York Stock Exchange.

Software major Infosys Technologies was trading at $43.10, down by 10.21 per cent from the previous close of $48 last Monday.

Among other software stocks, Wipro was down 24.41 per cent at $23.25, Satyam Computer was down 18.24 per cent at $6.95, Satyam Infoway was lower by 15 per cent at $1.02 and Silverline Technolgies was down 24.32 per cent at $1.12.

Among the financial intermediaries, ICICI was down 10.79 per cent at $6.20, ICICI Bank was down 26.74 per cent at $3.15 and HDFC Bank was down 19.75 per cent at $13.45.

Of the rest, VSNL was down 26.7 per cent at $7.55 and Rediff.com had fallen 1.96 per cent at $1. Dr Reddys Laboratories was also down by 8.63 per cent to $ 21.50. However, its lowest on the US bourses was $10.10.
Back to News Review index page  

Stocks Plunge, Dow drops
New York: On the very first day of the opening of the financial markets after the World Trade Center was razed to ground by terrorist attacks, stocks plummeted on Monday even as the Dow Jones industrial average pushed to its biggest point drop ever.

Not heeding to patriotic appeals, investors refrained from buying stocks.

Entertainment stocks like Walt Disney Co. and airline stocks like UAL Corp led the selloff on Wall Street's first day of trading since last week's assaults. The few winners included defense contractors like Raytheon Co. and hand gun maker Sturm Ruger & Co. as investors bet on U.S. retaliation and consumers becoming more security conscious. Stocks were little changed in after-hours trading, and investors are bracing for more stock declines.

The Dow Jones industrial average plunged 684.81 points, or 7.13 per cent, to end at 8,920.70, logging its biggest point loss ever and marking its lowest close since late 1998.

Politicians, regulators and grass-roots movements had exhorted investors to stage a patriotic rally, but few responded.

Trading was very heavy with 2.36 billion shares changing hands, the highest ever in the history of the NYSE. Roughly four stocks fell for every one that rose on both the NYSE and the Nasdaq.

Some 534 NYSE stocks and 718 Nasdaq stocks fell to new 52-week lows, including Web gear giant Cisco Systems. Cisco, which like many companies announced a stock buyback, was Nasdaq's most active issue and lost 47 cents to $14.

Central bankers on both sides of the Atlantic slashed interest rates, usually a positive for stocks. But apprehension over possible U.S. military retaliation and a weakening economy kept stocks planted in negative terrain.
Back to News Review index page