Sensex hits 2-mth low on spectrum row; sheds 345 pts
Stock markets today tumbled to a two-month low, with the BSE benchmark Sensex declining over 345 points on intense selling, mainly in RIL and SBI, amid political uncertainty triggered by the 2G spectrum row.business Updated: Nov 19, 2010 18:04 IST
Stock markets on Friday tumbled to a two-month low, with the BSE benchmark Sensex declining over 345 points on intense selling, mainly in RIL and SBI, amid political uncertainty triggered by the 2G spectrum row.
After an extremely volatile session, the Bombay Stock Exchange's 30-share index Sensex plunged by 345.20 points or 1.73 per cent to settle at 19,585.44.
The last time Sensex closed near today's level was at 19,594.75 on September 17.
The bellweather index has lost a steep 7 per cent in past two weeks.
Similarly, the National Stock Exchange's broader index Nifty also lost 108.50 points to finish trade at 5890.30.
Marketmen said the fluid political situation in the wake of 2G spectrum controversy dampened the investor sentiment. They further said that fears that an imminent rate hike in China also weighed heavy on the investors in Asia.
Profit-booking by edgy investors after the government's probe into alleged irregularities in the award of 2G spectrum licences sent stocks of Reliance Communications and Videocon Industries plunging by 3.57 per cent and 8.6 per cent, respectively.
Realty giant Unitech, which has a telecom joint venture with Norway's Telenor, too skid by 4.56 per cent.
Bucking the trend in telecom stocks Bharti Airtel surged by 1.22 per cent a day after unveiling a new identity and crossing the 200 million customer-mark.
"Panic selling was witnessed on the Dalal Street in view of the 2G spectrum issue. Investors also pulled out money from the banking stocks, which are exposed to micro finance. Also, a weak opening in European market further dampened the sentiment in the second half," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.
A sharp 3.46 per cent decline in the country's most valued firm Reliance Industries was a major contributor to the overall Sensex loss.
Besides, frontline banking stocks were the worst hit, with the country's largest lender SBI shedding 2.37 per cent. Private sector lenders ICICI Bank and HDFC Bank too slipped by 1.37 per cent and 1.92 per cent, respectively.
Brokers said there were concerns of rise in non-performing assets of lenders.
However, SKS Microfinance which plummeted by 20 per cent on Thursday, on Friday bounced back with a gain of 5.47 per cent.
Only four of the 30 Sensex components managed to settle with gains.
Auto major Hero Honda also bucked the market trend and gained 1.72 per cent powered by the speculations of deal with some global private equity firms.
Meanwhile, Reliance Infra tanked by 5.25 per cent, becoming the biggest loser on the Sensex.
"FII, who were net buyers, in the past are pulling out some of their profits due to the negative news pouring in from the domestic and global arena," Unicon Financial Services CEO Gajendra Nagpal said.