Mumbai Police apprehended Gurunath Meiyappan, a key official of the Indian Premier League's (IPL) Chennai franchise, late on Friday in connection with a spot-fixing scandal that has also led to the arrest of three cricketers. Full Article
Breakingviews columnists discuss the implications of inflation being in decline globally. Video
For months, markets have been dancing to central bankers' tune, but that may now be changing, writes James Saft. Full Article
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
BSE Sensex falls 3.4 pct as budget disappoints
MUMBAI (Reuters) - BSE Sensex fell 3.4 percent on Monday, its biggest drop in two weeks, after an interim budget failed to provide a much needed impetus to struggling sectors such as construction and autos.
Traders said the budget, which unveiled few populist measures ahead of a general election that must take place by May, disappointed investors who had been speculating on a stimulus plan to lift flagging growth.
"Because the economic situation is unprecedented, it was expected this interim budget would set an agenda for an economic direction," said Sanjeev Patkar, director of research at Dolat Capital.
"The government opted for an easier way out. It's a directionless budget," he said.
The main BSE stock index closed down 3.42 percent, or 329.29 points, at 9,305.45, its biggest one-day percentage point fall since Feb. 2 when it shed 3.8 percent.
Twenty-nine of its components dropped, while in the broader market losers outnumbered gainers by more than 2:1 on moderate volume of 278 million shares.
Bank stocks fell after acting Finance Minister Pranab Mukherjee proposed an increase in government borrowing, sending bond yields sharply higher.
Mukherjee said the fiscal deficit would rise to 6 percent of gross domestic product in 2008/09 from a planned 2.5 percent, a rise that could shake investors increasingly wary of emerging markets.
He predicted a deficit of 5.5 percent of GDP in 2009/10 but implied this could rise as government spending may have to jump later this year to shield the economy from a global slump and stem job losses.
"This is a political budget but does not give much confidence on how it will help revive growth," said Rupa Rege Nitsure, chief economist at Bank of Baroda.
India's economy is expected to slow to 7.1 percent in 2008/09, the slowest pace in six years and below 9 percent expansion last year.
Top lender State Bank of India fell 4.9 percent to 1,136 rupees and rival ICICI Bank dropped 5.8 percent to 409.20 rupees.
Bond yields rose with the 2018 bond yield climbing to 6.42 percent, from 6.17 percent at the previous close on supply worries.
Leading carmaker Maruti Suzuki dropped 1.45 percent to 620.60 rupees and top truck maker Tata Motors fell 1.3 percent to 136.10 rupees as the government did not announce any measures to boost demand in the sector.
Energy group Reliance Industries, which has the highest weight in the index, dropped 5.2 percent to 1,319.05 rupees.
The 50-share NSE Nifty index closed 3.39 percent lower at 2,848.50.
STOCKS THAT MOVED
* Satyam Computer Services climbed 6.4 percent to 49.25 rupees after the fraud-tainted outsourcer said late on Friday it would accelerate plans to find a suitor after the market regulator amended its takeover rules.
* Bar code scanner maker Bartronics India jumped 10.5 percent to 84.85 rupees, after It said it won a contract from the Delhi civic body to set up 2,000 internet kiosks on a build-operate-transfer model for nine years.
* MRO-TEK Ltd rose 4.7 percent to 23.40 rupees after the communication equipment maker said its board would meet on Feb. 25 to consider a share buyback.
MAIN TOP 3 BY VOLUME
* Unitech at 23.9 million shares
* Satyam Computer on 20.2 million shares
* Cals Refineries on 14.6 million shares
(For Quotes and Interactive Charts of BSE Sensex click here)
- Tweet this
- Share this
- Digg this