Indian shares tumble for second session in a row; ICICI Bank leads 
declines
declinesIndian shares extended losses for the second session in a row Monday, tumbling nearly 4 percent on fears that the credit crisis may take its toll on the European financial institutions, after the collapse of large U.S. banks. 
EUROPEAN BANKS HIT BY THE CREDIT CRISIS
Credit crisis fears returned on Monday, as the European states took steps to rescue the nations' lenders from the event of bankruptcy. The Belgian, Dutch and Luxembourg governments saved financial firm Fortis over the weekend to prevent a domino-like spread of failure. The UK government said lender Bradford & Bingley Plc's branch network will be sold to Spanish bank Santander and the remainder of the group will be nationalised.
Moreover, Iceland's government bought a 75 percent stake to take control of Glitnir Bank after the lender's funding position deteriorated. German lender Hypo Real Estate Holdings A.G. struck a last-minute deal with the government and a consortium of banks to resolve a refinancing squeeze.
MARKET COLLAPSES TRACKING EUROPEAN CUES
The Bombay Stock Exchange's benchmark 30-share Sensitive Index plunged 506.43 points or 3.87 percent to 12,595.75, recovering from the day's low of 12,402.84 points, it's lowest in a year and a half. The 50-share S&P CNX Nifty of the National Stock Exchange sank 135.20 points or 3.39 percent to 3,850.05.
Weak opening among the European indices and the UK government's announcement of Bradford triggered panic-selling in the banking and realty shares, which later spread across the counters.
'The market recovered by some points later, as insurance companies bought on the shares at lower levels later in the day,' said a dealer at a Mumbai-based brokerage.
At the close, all the 30 benchmark equities which constitute the Sensex declined except consumer goods giant Hindustan Unilever Ltd., which gained 0.8 percent to 254.50 rupees.
No. 1 private lender ICICI Bank Ltd. led the declines, sliding 12.1 percent to 493.30 rupees. The lender came up with a statement in the mid-market hours that its UK subsidiary has no exposure to U.S. sub-prime credit and that 98 percent of its non-India investment book of $3.5 billion was 'rated investment grade and above.'
Top engineering company Larsen & Toubro Ltd. dipped almost 5 percent to 2,345.35 rupees and no. 2 software company Infosys Technologies Ltd. slipped 3.85 percent to 1,391.95 rupees.
All 13 BSE sector indices declined, with the banking index being the worst hit. The gauge of 16 lenders tumbled 6.02 percent, and is off 34.8 percent since Sept. 28, a year ago.
About 263.9 million shares changed hands in the broader market, as 357 advancers trailed 2,287 decliners.
Forty-six of the 50 Nifty shares declined, led by world's fifth largest wind turbines maker Suzlon Energy Ltd. as it pared 12.4 percent to 153.50 rupees. State-run oil refining and marketing company Bharat Petroleum Corp. Ltd. (BPCL) gained the most as it rose 1.8 percent to 341.10 rupees on the National Stock Exchange, which recorded 555.1 million trades.
EUROPEAN BANKS HIT BY THE CREDIT CRISIS
Credit crisis fears returned on Monday, as the European states took steps to rescue the nations' lenders from the event of bankruptcy. The Belgian, Dutch and Luxembourg governments saved financial firm Fortis over the weekend to prevent a domino-like spread of failure. The UK government said lender Bradford & Bingley Plc's branch network will be sold to Spanish bank Santander and the remainder of the group will be nationalised.
Moreover, Iceland's government bought a 75 percent stake to take control of Glitnir Bank after the lender's funding position deteriorated. German lender Hypo Real Estate Holdings A.G. struck a last-minute deal with the government and a consortium of banks to resolve a refinancing squeeze.
MARKET COLLAPSES TRACKING EUROPEAN CUES
The Bombay Stock Exchange's benchmark 30-share Sensitive Index plunged 506.43 points or 3.87 percent to 12,595.75, recovering from the day's low of 12,402.84 points, it's lowest in a year and a half. The 50-share S&P CNX Nifty of the National Stock Exchange sank 135.20 points or 3.39 percent to 3,850.05.
Weak opening among the European indices and the UK government's announcement of Bradford triggered panic-selling in the banking and realty shares, which later spread across the counters.
'The market recovered by some points later, as insurance companies bought on the shares at lower levels later in the day,' said a dealer at a Mumbai-based brokerage.
At the close, all the 30 benchmark equities which constitute the Sensex declined except consumer goods giant Hindustan Unilever Ltd., which gained 0.8 percent to 254.50 rupees.
No. 1 private lender ICICI Bank Ltd. led the declines, sliding 12.1 percent to 493.30 rupees. The lender came up with a statement in the mid-market hours that its UK subsidiary has no exposure to U.S. sub-prime credit and that 98 percent of its non-India investment book of $3.5 billion was 'rated investment grade and above.'
Top engineering company Larsen & Toubro Ltd. dipped almost 5 percent to 2,345.35 rupees and no. 2 software company Infosys Technologies Ltd. slipped 3.85 percent to 1,391.95 rupees.
All 13 BSE sector indices declined, with the banking index being the worst hit. The gauge of 16 lenders tumbled 6.02 percent, and is off 34.8 percent since Sept. 28, a year ago.
About 263.9 million shares changed hands in the broader market, as 357 advancers trailed 2,287 decliners.
Forty-six of the 50 Nifty shares declined, led by world's fifth largest wind turbines maker Suzlon Energy Ltd. as it pared 12.4 percent to 153.50 rupees. State-run oil refining and marketing company Bharat Petroleum Corp. Ltd. (BPCL) gained the most as it rose 1.8 percent to 341.10 rupees on the National Stock Exchange, which recorded 555.1 million trades.
Q: What is your take on the kind of damage that we are seeing in a lot of largecap names like ICICI Bank and Unitech? Do you think they are getting oversold or there are legitimate reasons for these kinds of sharp falls?
Kapoor: To some extent, there is panic both in the real estate sector as well as in ICICI Bank if we take that specific name. The reasons are that in real estate, a lot of foreign money or private equity money had come in and all these institutions are finding themselves in problems. Real estate prices have the potential to go down much more than they have in the last one year or so.
So, that explains this panic in real estate stocks. ICICI Bank, in terms of valuations et cetera is at a very good price at this point to accumulate. But in a panic state, markets can become very irrational as they can become in a very bullish market.
So, one really cannot put a bottom to it. But at every decline, ICICI Bank is a stock that one can accumulate, but very gradually and carefully because we don’t know where this bottom will finally happen.
Kapoor: To some extent, there is panic both in the real estate sector as well as in ICICI Bank if we take that specific name. The reasons are that in real estate, a lot of foreign money or private equity money had come in and all these institutions are finding themselves in problems. Real estate prices have the potential to go down much more than they have in the last one year or so.
So, that explains this panic in real estate stocks. ICICI Bank, in terms of valuations et cetera is at a very good price at this point to accumulate. But in a panic state, markets can become very irrational as they can become in a very bullish market.
So, one really cannot put a bottom to it. But at every decline, ICICI Bank is a stock that one can accumulate, but very gradually and carefully because we don’t know where this bottom will finally happen.
---dggopi4u
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