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Friday November 27, 12:00 PM
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BSE Sensex falls 2.5 pct; banks, builders drop
MUMBAI (Reuters) – The BSE Sensex (^BSESN : 15992.18 -50
) fell more than 2 percent on Friday, with banks and property firms among the big losers, as nervous investors dumped riskier assets on concerns over Dubai's debt problems.
Although banks such as ICICI Bank (ICICIBANK.NS : 809.2 -3.2) and developers DLF and Unitech said they had no exposure to the Gulf country, the gloomy global sentiment kept the market under pressure.
"It is more of a situation of sentiment than actual impact on our companies," said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.
"Dubai was overexposed to debt as its real estate sector was very, very highly geared," he said. "Such an event elsewhere is not ruled out, but seems unlikely. Hopefully, this is a one-off case."
Dubai said on Wednesday it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate's breakneck growth.
The move raised investor fears that debt defaults could hit other parts of the globe, and rattled global markets sending banking shares tumbled.
Engineering and construction firm Lasren & Toubro fell as much as 6.2 percent, after a senior company official said it had about $20 million to $25 million exposure in Dubai.
By 11:25 a.m. (0555 GMT), the 30-share BSE index was trading down 2.5 percent at 16,433.77, with all components in the red. It fell as much as 2.7 percent earlier.
In the broader market, losers were nearly five times the number of gainers on volume of 123 million shares.
ICICI was down 4 percent at 831.20 rupees after falling as much as 6.4 percent. The No. 2 lender said it had no material exposure to Dubai corporates.
Top lender State Bank of India (SBIN.NS : 1936.8 -13.5) shed 3.5 percent to 2,175 rupees.
DLF slumped 8 percent early but recouped some ground and was trading down 5.6 percent at 334.50 rupees after the leading listed real estate firm said it had no exposure to Dubai.
The 50-share NSE (^NSEI : 4775.2 -17.45) index was down 2.7 percent at 4,869.45.
STOCKS ON THE MOVE
* Outsourcer Mahindra Satyam (SATYAM.BO : 98.3 +0.75
) was down 2.9 percent at 90.10 rupees, on concerns over its outlook after investigators said the extent of fraud that had hit Satyam earlier this year could be bigger than revealed.
* Ranbaxy bucked the trend and was up 2.4 percent at 440.50 rupees after the drug maker said it had launched a generic version of GlaxoSmithKline's medicine Valtrex in the United States.
* Suzlon Energy was up 0.4 percent at 69.95 rupees after the wind turbine maker said its German unit REpower Systems had signed a set of wind farm project contracts with EDF Energies Nouvelles and RES Canada for delivery of up to 954 megawatt.
MAIN TOP 3 BY VOLUME
* Suzlon Energy on 7 million shares
* Mahindra Satyam on 4.7 million shares
* Unitech on 3.3 million shares
(Reporting by Ami Shah; Editing by Ranjit Gangadharan)
