BSE Sensex nears 3-½ yr closing low; Satyam up

People watch a large screen displaying India's benchmark share index on the facade of the Bombay Stock Exchange (BSE) building in Mumbai in this January 24, 2008 file photo.

MUMBAI (Reuters) – The BSE Sensex fell 2 percent to its lowest close in almost three and a half years on Monday as deepening concerns about the health of the world economy sent markets reeling across Asia and Europe.

Energy group Reliance Industries Ltd and consumer goods firms ITC Ltd and Hindustan Unilever Ltd led the losses in light volume as investors were skittish ahead of market holidays on Tuesday and Wednesday.

Satyam Computer Services bucked the trend and rose after the fraud-tainted outsourcer kicked off a bidding process to sell a 51 percent stake in the company.

The stock ended up 15.8 percent at 48.75 rupees, after rallying 19 percent during trade, on top of a 20 percent jump on Friday. It topped the volumes for the second consecutive session with more than 35 million shares changing hands.

But financials and other IT-services firms dropped.

"There has been no let-up in selling. With visibility so low, most people prefer to sit on cash and hope for cheaper prices ahead," Miten Mehta, fund manager at Bell Wether Capital, said.

The 30-share BSE index shed 1.99 percent, or 165.42 points, to 8,160.40, its lowest close since Nov. 2, 2005.

In comparison, Japan's Nikkei average struck a 26-year low on Monday and other Asian markets slipped on worries about the fate of General Motors and U.S. banks.

An early slide in European shares also weighed on investor sentiment, traders said.

The benchmark BSE index, which fell as much as 2.6 percent during trade, has lost 15.4 percent this year as increasingly risk-averse foreign funds pulled more than $2.2 billion from the market.

Twenty-seven of its components fell while in the broader market, losers led advances in the ratio of 2:1 on relatively light volume of 213.7 million shares.

Reliance Industries fell 1.4 percent to 1,153.85 rupees, while state-run lender State Bank of India shed 4.7 percent to 896.80 rupees and private-sector ICICI Bank dropped 2.4 percent to 262.95 rupees.

Leading consumer-goods maker Hindustan Unilever and top cigarette maker ITC, which had held steady earlier this year, continued their decline from the previous week.

Hindustan Unilever shed 3.3 percent to 216.50 rupees, while ITC fell 4 percent to 158.20 rupees.

The 50-share NSE index closed down 1.8 percent at 2,573.15.

Trading resumes on Thursday.

MAIN TOP 3 BY VOLUME

* Satyam Computer on 35.2 million shares

* Rolta India Ltd on 7.4 million shares

* Unitech Ltd on 5.5 million shares

STOCKS THAT MOVED

* Sterlite Industries fell 2.2 percent to 244.45 rupees on concern its deal to buy bankrupt copper miner Asarco LLC for $1.7 billion may not yield immediate benefits and financing the buy may put a burden on Sterlite's balance sheet, a dealer said.

* SpiceJet Ltd rose 9.2 percent to 13.39 rupees on a Business Standard report the airline was in talks with rival GoAir for either a merger or to acquire a controlling stake, a dealer said.