The largest cement manufacturer in India, ACC, led the decliners, down 4% to Rs 1,053, after RBI restricted further Foreign Institutional Investors purchases in the stock as foreign holding had crossed the 22% ceiling.
Tata Steel declined 2.70% to Rs 463.10, after its offer to buy Anglo-Dutch steel-maker Corus Group was topped by Brazilian Companhia Siderurgica Nacional or CSN.
Banks suffered a steep decline as stocks were hit following the Reserve Bank of India draft circular on exposure to capital market by banks. Private sector bank ICICI Bank lost 1.95% to Rs 857.75, HDFC Bank dipped 3.60% to Rs 1,085.50, SBI was down 1.45% to Rs 1,207.50, Centurion Bank of Punjab slipped 2.87% to Rs 28.80, and Kotak Mahindra Bank was off 2.85% to Rs 375.90.
Metal shares also declined on profit-booking. Hindustan Zinc lost 5.92% to Rs 840.25, Sterlite Industries shed 1.14% to Rs 506, Hindalco slid 1.77% to Rs 171.70 and Kalyani Steel lost 3.12% to Rs 409 and National Aluminium Company edged down 1.11% to Rs 217.50.
9:45AM Stocks opened lower, despite multibillion-dollar deals.
Stocks opened slightly lower on Monday, despite several megadeal announcements with a combined value of more than $70 billion. Investors, still worried about the health of the economy, were more cautious than usual when there is a flurry of merger news. The five major acquisition deals included Blackstone Group’s bid for Equity Office Properties Trust, Freeport-McMoRan Copper & Gold’s offer to acquire Phelps Dodge, Nasdaq Stock Market’s bid for LSE, Bank of America’ bid to buy U.S. Trust from Charles Schwab, and Russia''s Evraz Group offer to buy Oregon Steel.
The Blackstone Group’s record-breaking agreement to buy Equity Office Properties Trust (
EOP: chart) for about $36 billion in cash and debt, rank as the largest leveraged buyout in history. Equity Office Properties rose 7.1% $47.90. In another deal, Freeport-McMoRan (
FCX: chart) agreed to acquire copper miner Phelps Dodge (
PD: chart) for $25.9 billion in cash and stock. Freeport-McMoRan gained 2.7%, while Phelps Dodge jumped 29%. Charles Schwab Corp. (
SCHW: chart) advanced after agreeing to sell its wealth-management division to U.S. Trust to Bank of America Corp. (
BAC: chart) for $3.3 billion. Similarly, shares of Oregon Steel (
OS: chart) climbed 8.6% after the steel producer agreed to be acquired by Russia''s Evraz Group for $2.3 billion.
The London Stock Exchange rejected a fresh takeover bid from The Nasdaq Stock Market (
NDAQ: chart) which made its second attempt to acquire the company. LSE said that the $5.1 billion bid ''substantially undervalued'' the London Market. The offer represents a premium of 54% on LSE''s closing price March 10, the day before the LSE said it had received an approach, and was the minimum bid it could make under British takeover rules.
In the first hour of trading, the Dow Jones industrial average was down 9.52, or 0.08%, at 12,333.04. The Standard & Poor''s 500 index was down 0.97, or 0.12%, at 1,400.23, and the Nasdaq composite index was down 5.46, or 0.22%, to 2,440.40. Bonds showed little movement, with the yield on the benchmark 10-year Treasury note unchanged at 4.61% from late Friday.
9:30AM London stocks drop despite the bid for LSE as media stocks weighed.
By mid morning, the
FTSE 100 in London lost 24.7 points, 0.4%, to 6,167.2.
Economic news
The UK exchange has turned down an approach from Nasdaq for the second time this year, rejecting an offer of 12.43 pounds a share, having rebuffed an initial takeover attempt in March.
Advancers
Miners recovered some of the losses from last week, excited by news that Freeport-McMoRan had agreed an $26 billion deal buy copper group Phelps Dodge. Antofagasta rose 3.3%.
Home Retail Group added 2% on weekend reports that buyout groups Blackstone and Kohlberg Kravis Roberts were considering a takeover bid for the company.
Decliners
ITV plunged as dealers reacted to news late on Friday that satellite broadcaster BSkyB had acquired a 17.9% stake in the broadcaster. ITV fell 1.7% while BSkyB dropped 1.4%. Credit Suisse cut its recommendation on ITV from overweight to neutral.
Other media stocks moved lower in sympathy. Yell Group fell 1.4% while WPP Group gave up 1% and Reed Elsevier was 0.7% lower.
Energy stocks were hit by a 1% drop in the price of oil. BG Group shed 1.5% to, Royal Dutch Shell lost 1.2% and BP was lower by 0.6%.
