Mumbai - The BSE Sensex snapped its three-day winning streak, dropping 2.62 percent or 261.69 points on Wednesday to close down at 9715.29 on profit-taking even as tech major Satyam Computer Services slumped to a 4-year low on corporate governance issues.
The 30-share benchmark index opened higher on Wednesday at 10,073.10, tracking overnight Wall Street gains but after witnessing choppy trade during morning session, tumbled to the day's low of 9682.91 on profit taking even as Indian tech major Satyam Computer Services plummeted to a 4-year low on sudden news that it had abandoned a deal for two firms, sparking concerns abroad over corporate governance.
After Wednesday's decline, the market barometer is down about 50.8 percent, making it one of the worst performing markets in Asia.
Twenty-one components closed in the red, the biggest loser being Satyam Computer Services, which plunged 30.22 percent to a 4-year low of Rs.158.05 on overnight news that founder-chairman B. Ramalinga Raju had intended to use company funds to buy two of his firms floated by him and his sons for $1.6 billion. Satyam abandoned the deal after its shares were hammered down 55 percent in Nasdaq overnight but it was too late to stop its decline in the Indian market.
Private sector utility majors Reliance Infrastructure and Tata Power tumbled 13.73 percent and 5.92 percent to Rs.549.15 and Rs.702.95 respectively.
Telecoms majors Reliance Communications and Bharti Airtel declined 13.36 percent and 4.73 percent to Rs.202.70 and Rs.709.65.
Real estate giant DLF slipped 8.64 percent to Rs.253.20.
Sensex heavyweight top listed Reliance Industries eased 2.64 percent to Rs.1350.15.
Other major losers were Jaiprakash Associates (down 12.11 percent at Rs.76.95), ACC (down 9.21 percent at Rs.486.30) and Sterlite Industries (down 5.16 percent at Rs.271.20).
The day's top gainer was ICICI Bank, which surged 2.43 percent to Rs.431.80. Smaller HDFC Bank climbed 1.83 percent to Rs.1002.05.
Tech majors Infosys Technologies and Wipro advanced 1.51 percent and 1.50 percent to Rs.1139.80 and Rs.243 respectively as investors moved to reallocate their portfolio of sector stocks.
Auto makers Mahindra & Mahindra and Maruti Suzuki rose 1.25 percent and 0.27 percent to Rs.303.95 and Rs.509.65 respectively.
Top consumer goods maker Hindustan Unilever soared 1.27 percent to Rs.251.25.
Other gainers were Grasim Industries (up .55 percent at Rs.1234.40) and ONGC (up 0.39 percent at Rs.716.50).
All the sectoral indices declined, the major losers being Realty (down 7.36 percent), TECk (down 5.02 percent), Power (down 4.44 percent), Metal (down 4.36 percent) and IT (down 4.04 percent).
The BSE Midcap and Smallcap indexes tumbled 3.33 percent and 2.60 percent to close at 3136.17 and 3678.56 respectively.
The overall market breadth was negative as 1569 losers outpaced 956 gainers while 72 closed unchanged.
Elsewhere, the broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) closed 2.87 percent or 87.40 points down at 2954.35.
According to market traders, Indian shares lost steam midway, after rallying on overnight news that the US Federal Reserve has moved to slash its key interest rate to historic lows, and surrendered their gains with Satyam donning the villain's role of the day.
Wall Street gained overnight after the Fed cut its target rate for loans between banks to a range of 0-0.25 percent and pledged to use "all available tools" to heal the US economy.
All traders agreed that Satyam's decision reflected poorly on corporate governance in Indian companies and could dent their credibility and future earnings.
"There has been some healthy profit booking after two weeks of gains. But this was triggered by Satyam, which has raised a lot of corporate governance issues," said Amitabh Chakraborty, president (equities), Religare Securities.
"We woke up to the cancellation of acquisition deal between Satyam Computers and its subsidiaries. But investors felt cheated and the scrip took a beating," said Arun Mewawalla, AVP, Alternate Research, ULKJ Securities.
"By announcing such a deal, which was wiping off the entire cash in the balance sheet, the (Satyam) management has given a bad impression," Paras Bothra, research head, Ashika Stock Brokers, said.
"It's an overall hit for market sentiment. It reflects poorly on corporate governance in Indian companies, and it's an issue that investors are now faced with," said Nikunj Doshi, investment manager at Envision Capital.
"The global developments are baffling, and institutional investors continue to remain risk averse. The market (in India) has been showing some strength, of late, but I think a better strategy would be to keep putting money gradually," said Arun Kejriwal of KRIS.
However, traders are optimistic that the market may look up on Thursday as market players are expecting a rate cut from the central bank on the back of cooling inflation.
Meanwhile, global crude prices dropped $3 on Wednesday to their lowest levels in more than four years after OPEC announced a record supply cut that dealers said may fail to offset slumping world energy demand.
US crude oil prices fell $3.40 to $40.20 a barrel by 11:45 a.m. EST (1645 GMT), the lowest since July 2004, while London Brent fell 80 cents to $45.85 per barrel after the Organization of Petroleum Exporting Countries (OPEC), eager to push prices back up, announced on Wednesday an agreement to cut 2.2 million barrels per day of output starting January 1, the biggest single reduction on record.
Elsewhere in Asia, the markets closed in the green, boosted by overnight Wall Street gains and on hopes of revival of US auto bailout plan.
Japan's Nikkei 225 climbed 0.52 percent to 8612.52; Hong Kong's Hang Seng surged 2.18 percent to 15,460.52; China's Shanghai Composite moved up 0.09 percent to 1976.82; Taiwan's Taiex advanced 0.67 percent to 4648.02; and South Korea's Kospi soared 0.71 percent to 1169.75.
However, bucking the trend, Singapore's Straits Times eased 0.16 percent to 1779.29.
Courtesy: in.ibtimes.com
Andhra Loyola College at Vijayawada and subsequently did his MBA from Ohio University, USA. Ramalinga Raju had a stint at Harvard too. He attended the Owner / President course at Harvard. 
After wooing many Indian realty majors and retailers, including Bharti, the Wadias, 
