MUMBAI: Shares in Indian construction and property developers fell sharply on Friday as fears mounted the government would widen a probe into a corporate loan bribery scandal.
The main real estate sector index tumbled nearly 15 percent on worries the multi-million dollar scam would hit loans to the sector over the near term and dent demand.
"The sentiment is definitely hit for now and market is reacting to that," said Mehul Dedhia, assistant vice-president of sales at brokerage Sharekhan.
A source in the Central Bureau of Investigation said it was not yet looking to widen the probe. Media reports said the CBI case involved more than 20 companies.
The main stock index was down 0.5 percent, setting it on course for its third straight weekly fall, two days after the Central Bureau of Intelligence (CBI) said it arrested eight top officials at banks and financial firms for taking bribes.
The shares of the financial firms and companies alleged to be involved in the scandal fell sharply.
Jaiprakash Power Ventures Ltd has received a notice from CBI and is complying with the probe, Chairman Manoj Gaur said. A panic among investors was leading to the company's share fall, he said.
Infrastructure company Jaiprakash Associates tumbled 13.9 percent to Rs 99, its lowest in more than 16 months, after media reports named it in the bribery scandal.
Shares of property developer Unitech were down 10 percent in mid-day trade after falling more than 26 percent in the morning. The company has not been named in any media reports so far but traders said the market was reacting to the possibility of more companies coming under fire from the CBI.
By 12:29 p.m. (0659 GMT), the 30-share BSE Index was trading down 0.22 percent at 19,275.03.
Dedhia said the slide would not affect the long-term outlook for the market.
"This does not mean the medium-term and long-term story is hit. One should start buying selectively," he said.
Other companies alleged to be involved in the scandal by media such as Suzlon Energy , DB Realty, Hindustan Construction Co dropped between 5.7 percent and 10 percent.
Money Matters fell 10 percent. The CBI had said on Wednesday it arrested eight officials from state-run listed companies, including the chief executive of LIC Housing Finance , for taking hundreds of millions of dollars in bribes to facilitate large corporate loans.
Senior executives at state-run Punjab National Bank , Bank of India and Central Bank of India were also taken into police custody late on Wednesday.
LIC Housing, Punjab National Bank, Bank of India and Central Bank of India were down between 2.9 percent and 9 percent.
Losers were more than 8 times the number of gainers while 359 million shares changed hands on the BSE.
The 50-share NSE index was down 0.3 percent at 5,782.84.
"There is no default and pay-in and pay-out are happening on time. There are no margin pressures. Settlements are happening in time," Divya Mallick, spokeswoman for the National Stock Exchange, said.
STOCKS THAT MOVED: MphasiS fell 5.2 percent to 555 rupees as investors were disappointed with an analysts meet on Thursday where the software provider said margins would be under pressure during FY11, two dealers said.
Core Projects & Technologies and Orchid Chemicals plunged 35 percent and 7.3 percent respectively. The National Stock Exchange said fresh derivative contracts cannot be built in the two companies as positions had crossed market limits and dealers said investors were unwinding positions.
The main real estate sector index tumbled nearly 15 percent on worries the multi-million dollar scam would hit loans to the sector over the near term and dent demand.
"The sentiment is definitely hit for now and market is reacting to that," said Mehul Dedhia, assistant vice-president of sales at brokerage Sharekhan.
A source in the Central Bureau of Investigation said it was not yet looking to widen the probe. Media reports said the CBI case involved more than 20 companies.
The main stock index was down 0.5 percent, setting it on course for its third straight weekly fall, two days after the Central Bureau of Intelligence (CBI) said it arrested eight top officials at banks and financial firms for taking bribes.
The shares of the financial firms and companies alleged to be involved in the scandal fell sharply.
Jaiprakash Power Ventures Ltd has received a notice from CBI and is complying with the probe, Chairman Manoj Gaur said. A panic among investors was leading to the company's share fall, he said.
Infrastructure company Jaiprakash Associates tumbled 13.9 percent to Rs 99, its lowest in more than 16 months, after media reports named it in the bribery scandal.
Shares of property developer Unitech were down 10 percent in mid-day trade after falling more than 26 percent in the morning. The company has not been named in any media reports so far but traders said the market was reacting to the possibility of more companies coming under fire from the CBI.
By 12:29 p.m. (0659 GMT), the 30-share BSE Index was trading down 0.22 percent at 19,275.03.
Dedhia said the slide would not affect the long-term outlook for the market.
"This does not mean the medium-term and long-term story is hit. One should start buying selectively," he said.
Other companies alleged to be involved in the scandal by media such as Suzlon Energy , DB Realty, Hindustan Construction Co dropped between 5.7 percent and 10 percent.
Money Matters fell 10 percent. The CBI had said on Wednesday it arrested eight officials from state-run listed companies, including the chief executive of LIC Housing Finance , for taking hundreds of millions of dollars in bribes to facilitate large corporate loans.
Senior executives at state-run Punjab National Bank , Bank of India and Central Bank of India were also taken into police custody late on Wednesday.
LIC Housing, Punjab National Bank, Bank of India and Central Bank of India were down between 2.9 percent and 9 percent.
Losers were more than 8 times the number of gainers while 359 million shares changed hands on the BSE.
The 50-share NSE index was down 0.3 percent at 5,782.84.
"There is no default and pay-in and pay-out are happening on time. There are no margin pressures. Settlements are happening in time," Divya Mallick, spokeswoman for the National Stock Exchange, said.
STOCKS THAT MOVED: MphasiS fell 5.2 percent to 555 rupees as investors were disappointed with an analysts meet on Thursday where the software provider said margins would be under pressure during FY11, two dealers said.
Core Projects & Technologies and Orchid Chemicals plunged 35 percent and 7.3 percent respectively. The National Stock Exchange said fresh derivative contracts cannot be built in the two companies as positions had crossed market limits and dealers said investors were unwinding positions.
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