Housing loan scam continues to haunt markets

The housing loan scam continued to haunt the domestic markets. Realty stocks witnessed a sharp fall as the CBI issued notices to 21 firms.

Major headlines

Housing scam: CBI issues notices to 21 companies

SC rejects Reliance Infrastructure road toll bid plea

Cairn seeks government nod to sell stake to Vedanta



Indian indices

The housing loan scam exposed by the Central bureau of Investigation (CBI) continued to haunt the market, realty stocks were hit the most. The CBI issued notice to 21 firms related to the housing loan scam; this triggered a heavy sell-off in realty stocks. Weak Asian markets also contributed to the decline in domestic stock prices, while continued worries on euro zone debt crises also weighed on the market. Small-cap and mid-cap indices tumbled over 4% and 3% respectively.

Among the heavyweights, Reliance Industries slipped 1.2% while BHEL was down 2%. Cairn India and Sterlite Industries plunged 4.6% and 4% respectively. FMCG, auto, power, telecom, Anil Dhirubhai Ambani Group (ADAG) stocks, HDFC group and private sector metal stocks pulled the market down.

The top gainers in the BSE Midcap Index were Petronet LNG, City Union Bank, Aurobindo Pharma, Coromandel International and Patni Computer. These were up by 2.5-5.2%.

The top losers in the BSE Midcap index were Shree Ashtavinayak, Hindustan Constructions, ARSS Infrastructure Projects, Man Infraconstruction and Indiabulls Realestate. These were down by 12-20%.

The Sensex began today’s session 74 points higher at 19392 tracking mixed Asian cues. The index soon trimmed all the gains and slipped in to the negative territory as Asian markets turned negative. The index slid further and hit the day’s low of 18955 as the realty index tumbled over 11%. However, from the day’s low, the market started to recover. The index erased all the losses and turned positive in the afternoon session. However, in the last hour of trade, the markets again turned negative and ended the session lower.

At the finishing line, the Sensex shut at 19137, lower by 182 points. The Nifty ended at 5852, down by 48 points.

Rupee Update: The Indian rupee opened at 45.59 per dollar versus 45.51 yesterday.

Market sentiment

The market breadth was extremely weak as falling stocks outnumbered the rising ones by over six times. Of the 3,072 stocks on the BSE, 2,508 declined while 485 surged. Seventy nine stocks traded unchanged.

Sectoral and stock screening

All the 13 sectoral indices ended the session in the negative territory. The BSE realty index continued its southward journey by sliding 4.68%, followed by the BSE Consumer Durables (CD) which declined by 3.90%. The BSE Metal and BSE Power indices slid by 2.54% and 2.13% respectively. The rest of the indices slipped in the range of 0.02-1.92%.

Looking into 'A' group stocks, IRB Infrastructure gained the most, up by 4.89%, followed by Petronet LNG that surged by 4.02% and Grasim Industries advanced by 3.79%. On the flip side, Hindustan Construction Company slid the most, down by 18.99%, followed by Adani Enterprises that declined by 16.99% and BGR Energy which fell by 12.40%.

Viewing volumes

Government's power utility - Power Grid Corporation was traded the most, with over 2.21 crore shares changing hands on the BSE, followed by construction firm – Hindustan Construction Company (2.05 crore shares), industrial finance company - IFCI (1.79 crore shares), India's second largest developer - Unitech (1.42 crore shares) and Indian ship builder – Pipava Shipyard (0.91 crore shares).

Global signals

European shares fell early on Friday as the euro zone debt crisis intensified with Portugal under pressure to accept a bailout and on miners being hit by weaker commodity prices on Chinese inflation worries.

Asian indices closed in the negative territory. Jakarta Composite and Kospi Index fell over 1% each.

The US markets point to a lower opening on wall street after the Thanksgiving holiday on Thursday.

Market Outlook: No important data from the US tonight.