Satyam scandal pulls down markets

07 Jan 2009 | 18:50
Satyam scandal pulls down markets

The multi-thousand crore Satyam scandal that was uncovered early this morning led to a heavy sell-off in the markets today. B Ramalinga Raju, the outgoing chairman of Satyam, admitted to cooking up figures in the Satyam balance sheet. The abortive Matyas deal last month that brought the company much bad press was also aimed to cover his tracks.

While the Sensex closed 749.05pts or 7.25% lower at 9,586.88, the Nifty lost 192.4pts or 6.18% to close at 2920.4. The broad market indices too ended lower as the BSE Midcap and Small Cap indices were down by 7.17% and 6.29% respectively. Market breadth was pathetic as A/D ratio was 0.2:1 on the BSE. NSE cash turnover was higher at Rs.15,509crs. Vs. Rs.13,087crs. on Tuesday.

All the sectoral indices ended in the red. The top losers were the BSE Realty, Oil and Gas, IT, Bankex and Capital goods indices. The top losers from the BSE-30 were Satyam, JP Associates, Rcom, DLF, Rel infra and Reliance. The top gainers were HUL, Infosys, Maruti and Wipro.

With the Satyam debacle, the market sentiment has turned negative. The Nifty has also reversed it's short term uptrend by closing below the previous lows of 3050. Downside supports to watch now are at 2900-2850. We recommend a go slow approach with respect to fresh longs till we see signs of sustainable strength.