The Hindu Business Line : MTNL, HDFC Bank, ICICI see major fall

Negative news from big corporates in the US, including AIG and Fannie Mae, and rising crude oil prices to record levels turned the direction of the US stocks, which were on the recovery path after the recent slump. The S&P 500 Index slumped 1.8 per cent and the Dow Jones Industrial Average fell 2.4 per cent, while the tech-focussed Nasdaq declined by 1.3 per cent.

The fall was even bigger for the domestic markets, as the rising inflation continued to affect the sentiment. The BSE Sensex crashed by 4.9 per cent and the NSE’s S&P CNX Nifty by 4.7 per cent.

The bear hammering spared none of the ADRs — with the worst performer being MTNL, whose ADR slumped 13.2 per cent.

Banking majors HDFC Bank and ICICI Bank crashed by 9.2 per cent and 9.4 per cent respectively. Sentiment towards banking sector turned weak on fears that high inflation could put pressure on the Government to raise the interest rate.

Tata Motors and Tata Communications, tumbled by 6.9 per cent each. Inflation numbers and surging crude prices seem to have affected the sentiment for Tata Motors.

The Department of Telecom’s announcement to defer a decision on divesting its 26 per cent stake in Tata Communications (formerly VSNL) till the issue related to the company’s surplus land is settled, inflicted negative sentiment on it.

Among the IT sector, Patni Computers witnessed sharp fall of 5.3 per cent at $12.81 ($13.52) followed by Infosys Technologies (4.5 per cent), Wipro (4.3 per cent) and Satyam Computer (4 per cent).

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