Strong response to the initial public offer (IPO) of NHPC raised concerns it will suck out liquidity from the secondary market. Power, auto, realty and banking stocks were the major losers. Index heavyweight Reliance Industries (RIL) slumped. The BSE 30-share Sensex was down 353.79 points or 2.28%. The market breadth, indicating the overall health of the market, was weak.
Foreign funds today dumped stocks worth a net Rs 1,050.81 crore, provisional data released by the stock exchanges after trading hours showed. Domestic funds bought stocks worth a net Rs 414.43 crore.
The Sensex has lost 743.59 points or 4.67% in the past two trading sessions. The barometer index has shed 763.99 points or 4.79% in four trading sessions form a 14-month closing high of 15,924.23 on Monday, 3 August 2009.
However, the recovery proved short-lived. The market weakened in morning trade. The market cut losses later. The market weakened again later. It cut losses before tumbling in late trade.
Finance Minister Pranab Mukherjee today said the government and Reserve Bank of India will balance a heavy borrowing plan and ensure adequate funds for the private sector.
The Reserve Bank of India (RBI) will maintain an accommodative monetary stance until the economy shows signs of recovery, a junior finance minister Namo Narain Meena told parliament on Friday, citing last month's policy review report.
The IPO of NHPC, which opened for subscription today, was subscribed 3.33 times by 16:00 IST, data on NSE website showed. The IPO received bids for 558.37 crore shares compared to the issue size of 167.7 crore shares. NHPC is planning to raise Rs 6,040 crore at the upper end of the issue price band of Rs 36. The government kickstarts the divestment process by selling shares in NHPC.
NHPC is selling 167.7 crore shares comprising of 5% divestment of stake by the government and infusion of 10% fresh equity. The strong response for the first state-run IPO in 18 months could embolden the government to sell stake in more firms. Steel minister Virbhadra Singh said today that the government has identified two state run steel firms for stake sale and may sell 20% stake in these firms.
The S&P CNX Nifty was down 104.10 points or 2.27% to 4,481.40. Nifty August 2009 futures were at 4467, at a discount of 14.40 points as compared to the spot closing of 4481.40. Turnover in NSE's futures & options (F&O) segment was Rs 65,231.26 crore, much lower than Rs 73,819.40 crore on Thursday, 6 August 2009.
BSE clocked a turnover of Rs 5424 crore, lower than Rs 7169.11 crore on Thursday, 6 August 2009.
The market breadth, indicating the overall health of the market, was weak. On BSE, 743 shares advanced as compared with 1921 that declined. A total of 78 shares remained unchanged.
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