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Friday November 27, 08:11 PM
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BSE Sensex knocked by Dubai, but end off lows
By Ami Shah
MUMBAI (Reuters) – The BSE Sensex (^BSESN : 16036.21 -5.97
) fell 1.32 percent on Friday to its lowest close in more than two weeks, although the market ended well off its lows as initial fears over the impact of Dubai's debt problems gave way to bargain hunting.
Assurances by banks and builders that they had no material exposures to Dubai calmed rattled investors and eased concerns about an imminent outflow of foreign capital, helping the market pare most of a drop of 3.8 percent.
Leading private banks ICICI Bank (ICICIBANK.NS : 808.4 -4), diversified Jaiprakash Associates and developers DLF, Unitech and Sobha Developers were among those to end comfortably above their intra-day lows.
"I would not read too much into Dubai. Is there a direct impact on our market? The answer is 'No'," said Anand Shah, head of equities at Canara Robecco Mutual Fund.
"Fundamentally, we are not impacted. But if the risk appetite comes off, the liquidity flow could reduce."
The 30-share BSE index fell 222.92 points to 16,632.01, its lowest close since Nov 10, with 25 components losing ground.
The benchmark index has rallied more than 70 percent in 2009, on the back of foreign fund inflows of more than $15 billion.
ICICI Bank closed down 1.7 percent 851.25 rupees, recovering from a fall of 6.4 percent, and top lender State Bank of India (SBIN.NS : 1935.15 -15.15) ended down 0.5 percent after falling as much as 4.8 percent.
Leading realty firm DLF recovered from a fall of 8 percent to end down 1 percent.
Dubai said 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.
That sparked investor fears that debt defaults could hit other parts of the globe, rattling world markets.
"Valuations were at a point where they were looking for reasons to correct," said Nitin Rakesh, CEO of Motilal Oswal's asset management business.
"Not just markets here, but markets globally were at year highs. This has been one of the strongest years in recent history globally," he said.
Engineering and construction firm Larsen & Toubro (LT.NS : 1454.35 -7.5) said its exposure to Dubai was $20 million to $25 million, while state-run lender Bank of Baroda said it has exposure of 7-8 percent of its loan book in the United Arab Emirates.
Larsen & Toubro fell as much as 6.2 percent, but trimmed some of the losses and closed 2.7 percent lower at 1,586.50 rupees.
Bank of Baroda declined 4.6 percent to 521.40 rupees.
"Based on available data, Bank of Baroda seems to have the biggest exposure to Dubai -- this could cause the stock to come under some pressure in the near term," Morgan Stanley said in a note on India financial services.
In the broader market, losers outnumbered gainers in the ratio of 2.7:1, on relatively moderate volume of 382 million shares.
The 50-share Nifty (^NSEI : 4780.85 -11.8) closed 1.27 percent lower at 4,941.75 points, its lowest close since Nov. 10.
STOCKS THAT MOVED
* Outsourcer Mahindra Satyam (SATYAM.BO : 98.65 +1.1
) closed 2.4 percent lower at 90.55 rupees. It fell 13.4 percent this week on concerns over its outlook after investigators said the extent of fraud that had hit Satyam Computer Services earlier this year could be bigger than revealed.
* Ranbaxy bucked the market trend and rose 3.3 percent to 444.05 rupees. The drug maker said it had launched a generic version of GlaxoSmithKline's medicine Valtrex in the United States.
* Energy explorer Cairn India, which is a unit of U.K.-based Cairn Energy, fell 2.6 percent to 268.30 rupees. A total of 800,000 shares changed hands in two block deals on the National Stock Exchange at 265 rupees per share.
* Suzlon Energy rose 6.2 percent to 74.05 rupees. 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 megawatts.
* State-run oil marketing companies Indian Oil Hindustan Petroleum and Bharat Petroleum (BPCL.NS : 567.25 +6.7) rose 0.2-1.8 percent as oil prices fell below $74 a barrel. These companies are made to sell products at mandated discounts.
MAIN TOP 3 BY VOLUME
* Suzlon Energy on 27.4 million shares
* Unitech on 15.3 million shares
* Mahindra Satyam on 11.9 million shares
(Editing by John Mair)
(For more news on Reuters Money visit http://www.reutersmoney.in)
