Sensex drops over 1%, Kingfisher slumps 11%
Sensex fell more than 1% today, extending losses to a third consecutive session, in anticipation of subdued quarterly earnings beginning next week, with many companies seen hit by high borrowing costs and slowing growth.business Updated: Jan 06, 2012 11:19 IST
The 30-scrip sensitive index (Sensex) of the BSE fell more than 1% on Friday, extending losses to a third consecutive session, in anticipation of subdued quarterly earnings beginning next week, with many companies seen hit by high borrowing costs and slowing growth.
Concerns about the impact of the euro zone crisis on the global economy pushed Asian shares down, while a weak euro triggered worries about the outlook for the rupee that slumped nearly 16% in 2011.
The main 30-share BSE index was down 1.15% at 15,674.37 by 10:46 a.m. (0516 GMT), with 27 of its components falling.
"The market has turned cautious as we move closer to the earnings season," said Ambareesh Baliga, chief operating officer Way2Weath Securities. "People are expecting companies to show forex losses and some of these losses may be bigger than what is estimated."
The benchmark index, which fell nearly a quarter in 2011, rose more than 3% in the first two days of the new year before pulling back again.
Financial stocks led the losses with State Bank of India , falling 1.9% after the top lender said it considered loans given to cash-strapped Kingfisher Airlines as a non-performing asset.
Kingfisher slumped as much as 11% after the country's aviation regulator asked the carrier to provide a specific timeline for getting its grounded aircraft back in the air and for its recapitalization efforts.
Private-sector lenders ICICI Bank fell 2.5% and HDFC Bank was down 0.8%.
Motorcycle makers Hero MotoCorp and Bajaj Auto fell 3.2% and 1.6%, respectively, on worries earnings would be subdued. Utility vehicle and tractor leader Mahindra & Mahindra dropped 1.3%.
The broader 50-share NSE index was down 1.3% at 4,690.3. In the broader market, there were 1.6 losers for every gainer on volume of 146 million shares.