India’s stock benchmark slumped to its lowest in more than two years as the credit crisis deepened in Europe, reinforcing concern the global economy will slow.
Reliance Industries Ltd. led the largest stocks in the index lower after Germany bailed out Hypo Real Estate Holding AG and the U.K. said it would rescue its lenders. Reliance dropped 6.8 percent to its lowest since May 2007. Infosys Technologies Ltd. fell 5.3 percent to 1,318.65 rupees, the lowest since March.
“We have to brace ourselves for a wild ride as we get more bad news on the credit crisis,” said Ajay Bodke, who helps manage the equivalent of $872 million of stocks at IDFC Mutual Fund in Mumbai.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, tumbled 724.62 points, or 5.8 percent, to 11,801.70, the lowest since Sept. 12, 2006. The BSE 200 Index declined 6.1 percent to 1,423.32. The S&P CNX Nifty Index on the National Stock Exchange fell 5.7 percent to 3,602.35. Nifty futures for October delivery fell 5.2 percent to 3,640.
BNP Paribas SA will take control of Fortis’s units in Belgium and Luxembourg after government efforts to ensure the company’s stability failed, while Germany’s government and financial institutions agreed on a 50 billion euro ($68 billion) rescue package for Hypo Real Estate Holding AG. U.K. Chancellor of the Exchequer Alistair Darling said Britain is “ready to do whatever it takes” to help its banks.
U.S. Payrolls Drop
Separately, in the U.S., payrolls dropped by 159,000 last month, the most in five years, the Labor Department said on Oct. 3. The world’s largest economy has lost 760,000 jobs this year, compared with the 1.1 million created last year.
Reliance, India’s most valuable company, dropped 6.8 percent to 1,641.60 rupees, the lowest since May 16, 2007. Infosys, India’s No. 2 software services exporter, declined 5.3 percent to 1,318.65 rupees, the lowest since March 18. Tata Consultancy Services Ltd., the largest software developer, fell 5.9 percent to 619 rupees, the lowest since July 14, 2005. Indian software companies get more than half their sales from the U.S.
Copper declined 4.7 percent to $5,730 a metric ton on the London Metal Exchange today. Crude oil fell below $90 a barrel in New York for the first time since February, dropping as much as 5.3 percent to $88.89 a barrel. It was at $89.63 at 12:43 p.m. in London.
The value of the 19 commodities in the Reuters-Jefferies CRB Index fell $280.6 billion, or 43 percent, from its July 3 peak, a loss larger than their total worth two years ago, according to data compiled by Bloomberg.
Metals Decline
Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, dropped 15 percent to 335.50 rupees, the lowest in more than two years. Tata Steel Ltd., India’s largest maker of the alloy, fell 11 percent to 350 rupees, the lowest since June 14, 2006. Cairn India Ltd., an oil producer, fell 11 percent to 175.05 rupees, the lowest since Oct. 8, 2007.
Overseas investors sold a net 2.84 billion rupees ($60 million) of Indian equities on Oct. 1, increasing their outflow this year from stocks to $9.2 billion, the nation’s market regulator said.
The following were among the most active stocks traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
ACC Ltd. (ACC IN) slid 25.40 rupees, or 4.1 percent, to 599.70, the most since Aug. 19. The cement maker controlled by Switzerland’s Holcim Ltd. reported September sales rose 7.7 percent to 1.67 million metric tons.
Cambridge Solutions Ltd. (CAMB IN) added 3 rupees, or 5.1 percent, to 62.40, the highest since Jan. 23. Xchanging Plc, the U.K. provider of back-office services agreed to buy 75 percent of Bangalore, India-based Cambridge Solutions for 83 million pounds ($147 million) in stock and cash.
Dr. Reddy’s Laboratories Ltd. (DRRD IN) fell 74.35 rupees, or 14 percent, to 475.75, the most since March 1, 2004. India’s second-biggest drugmaker may delay selling its diabetes drugs, the Mint newspaper reported, without saying where it got the information. The sale of balaglitazone has been delayed because Rheoscience A/S, the Danish firm conducting clinical trials on it, has run into financial problems, the report said.
GMR Infrastructure Ltd. (GMRI IN) dropped 3.85 rupees, or 4.6 percent, to 79.05, the lowest since April 27, 2007. The operator of airports in the Indian cities of New Delhi and Hyderabad had its stock rating cut to “hold” from “buy” at Citigroup Inc.
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