* Global stocks slide on U.S. jobs data; Hungary woes
* Foreign fund outflows weigh
* Reliance Comm up on stake sale to strategic investor
plan
(Updates to mid-morning)
MUMBAI, June 7 (Reuters) – Indian shares shed more than 2
percent on Monday as investors joined a global sell-off after
weak U.S. jobs data and concerns over a potential debt crisis
in Hungary hit risk appetite. Financials led the fall.
Reliance Communications (RLCM.BO) bucked the trend and
jumped more than 6 percent after the No.2 Indian mobile
operator’s board approved selling up to 26 percent stake to
strategic or private investors at a premium to its current
market price. [ID:nSGE65605M]
By 10:57 a.m. (0527 GMT), the 30-share BSE index .BSESN
was trading down 2.1 percent at 16,759.06 points, with 27 of
its components declining.
“Risk is off the table as there is uncertainty as to global
developments,” said Vaibhav Sanghavi, director of Ambit
Capital.
“It does not matter if a country is outperforming or
underperforming right now. The money is flowing out of the
system,” he said.
Foreign funds, which play a decisive role in setting
direction, have sold stocks worth around $22 million this month
after dumping $2 billion in May following a global trend to
reduce risk exposure in the wake of the euro zone debt woes.
The benchmark index is down 4 percent so far this year,
less than half the loss in MSCI’s measure of Asian shares other
than Japan .MSCIAPJ that has shed nearly 9 percent.
Reliance Communications was up 1.1 percent at 170 rupees,
after rising as high as 179 rupees. About 3.9 million shares
changed hands in first two hours of trade, about double the
full-day average of nearly 2 million in the past 30 days.
Kotak Securities said any deal to get strategic or private
investors would be positive for the company, but negative for
the sector that has been battling wafer-thin call tariffs and
severe competition.
“This event would mean a further infusion of risk capital
in the industry, without leading to any consolidation,” the
brokerage said in a note.
Financials fell after the finance minister told Reuters on
Friday the country would not pause rate hikes for now.
[ID:nSGE6530D1]
Top lender State Bank of India (SBI.BO) was down 2.5
percent, while rivals ICICI Bank (ICBK.BO) and HDFC Bank
(HDBK.BO) shed 3 percent and 0.9 percent respectively.
Metals makers dropped as Shanghai copper slid by its 5
percent daily limit and London futures slumped to near
eight-month lows. [ID:nSGE65600L]
Aluminium maker Hindalco (HALC.BO) and non-ferrous metal
producer Sterlite Industries (STRL.BO) were down 5 percent and
4 percent respectively.
Tata Steel (TISC.BO), the world’s eighth-largest steel
producer, and Jindal Steel and Power (JNSP.BO) dropped 3.3
percent and 2.7 percent respectively.
Real estate firms DLF (DLF.BO), state-run utility NTPC
(NTPC.BO) and outsourcer Wipro (WIPR.BO), three index firms
that will be impacted by a new listing rule, fell between 1.7
and 5.3 percent.
The government said on Friday listed companies must have a
public float of at least 25 percent, a move which could prompt
tens of billions of dollars in share sales. [ID:nSGE6530FQ]
Oil and Natural Gas Corp (ONGC.BO) rose 0.1 percent ahead
of a ministers’ meet to discuss deregulation of fuel prices.
For scenarios of possible outcomes for fuel price reforms, see
[ID:nSGE65607F]
In the broader market, losers were more than thrice the
number of gainers on volume of 80 million shares.
The 50-share NSE index was down 2.2 percent at
5,022.50.
Elsewhere, Japan’s Nikkei .N225 was down 3.6 percent,
while Hong Kong’s Hang Seng index .HSI shed 2.4 percent.
STOCKS ON THE MOVE
* Oil explorer Cairn India (CAIL.BO), a unit of UK’s Cairn
Energy (CNE.L), fell 3.5 percent to 289.55 rupees as crude oil
dropped below $70 per barrel for the first time in nearly two
weeks.
* Ranbaxy (RANB.BO) dropped 1.6 percent to 423.25 rupees
after DNA Money newspaper reported on Saturday the British unit
of the Indian drugmaker is recalling all unused stock of a
batch of a nerve pain treatment after failing to update
mandatory safety information. [ID:nSGE65400U]
MAIN TOP 3 BY VOLUME
* Reliance Communications on 3.9 million shares
* Suzlon Energy (SUZL.BO) on nearly 2 million shares
* IFCI (IFCI.BO) on 1.5 million shares
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Euro falls broadly, 4-yr low vs dlr on debt worry
[FRX/]
* Oil drops below $70 on Europe debt woes, U.S. jobs
[O/R]
* Euro at 4-yr lows; stocks drop in risk rout
[MKTS/GLOB]
* Wall St hit by U.S. jobs data, European worries
[.N]
* For closing rates of Indian ADRs
INADR
