MUMBAI--India's main stock indexes ended flat Monday, but the shares of several mid-sized companies fell sharply due to what dealers said a selloff by some market participants ahead of this week's federal budget.
The Bombay Stock Exchange's S&P BSE Sensex ended higher by 14.68 points, or 0.1%, at 19331.69 points, while the National Stock Exchange's 50-share Nifty index gained 4.45 points, or 0.1%, to 5854.75 points.
Read More- Shares of Indian Non-Banking Finance Firms Gain
But the selloff in midcap stocks dominated the day's business on the exchanges. The sharp fall in these stocks also briefly hurt overall investor sentiment and pulled the main indexes temporarily down.
CORE Education & Technologies, the worst hit, lost more than 62% of its market value and closed at 110.95 rupees.
Another company hit severely was Welspun Corp., a maker of pipes used by oil companies. It fell as much as 33% before recovering part of the losses to end 20% down at 67.20 rupees.
Trading volumes for both CORE Education and Welspun shares were multiple times their daily average for the past 30 days. FactSet data showed more than 20 bulk deals in each counters.
CORE Education, a provider of educational infrastructure and consulting services, said its businesses were running normally.
Its founders have raised some funds by pledging their shares, but the lenders haven't sold any of those shares, Chief Financial Officer Nikhil Morsawala told television channel CNBC-TV18.
The company is worried about the sudden drop in its share price and will take up the issue with regulators as well as stock exchanges, Mr. Morsawala said.
Akhil Jindal, a director at the Welspun group, told TV channel ET NOW that there was no fundamental reason for the sudden drop in the group company's share price.
ABG Shipyard, Opto Circuits, Orbit Corp. and Aanjaneya Lifecare were also hit by the selloff. Shares of these companies ended down between 12% and 20%.
Their executives couldn't be reached for comments.
"We don't know the exact reason for the selling," said Shashi Sharma, an assistant manager at Triveni Management Consultancy Services, a Mumbai-based brokerage firm. He however said there could be redemption pressures on some funds which invest in midcap stocks.
Finance Minister P. Chidambaram will on Thursday present the federal budget detailing the government's revenue and spending plans as well as economic policies for the fiscal year starting April 1.
Volume in the BSE's cash market rose to 18.82 billion rupees ($348.6 million) Monday from Friday's 16.91 billion rupees.
Software exporter Infosys, up 2.9% at 2917.20 rupees, was the top Sensex gainer. Bigger rival Tata Consultancy rose 1.2% to close at 1471.30 rupees.
Engineering company Larsen & Toubro fell 2.3% to 1401.50 rupees. Petrochemicals major Reliance Industries ended down 1.0% at 853.95 rupees.
No comments:
Post a Comment