10:00AM New York, 8:30PM Mumbai – Sensex drops led by a global decline. Ballarpur Industries soars 7% on restructuring.

The Sensex in Mumbai trading pummeled 541.74 or 3.4% to 15,234.57 participating in a global sell-off in stocks on a heavy trading volume. Emerging markets suffered most led by 4.2% decline in Turkey, 4% loss in Brazil and similar losses in Korea and Philippines.

Stock trading turnover on BSE totaled 6,593 crore rupees, up 15% from a day ago trading volume of 5,758 crore rupees. Only three stocks in 30-stock index managed to close higher and the rest declined.

Gainers

Ballarpur Industries soared 7% to 131 rupees after the company decided to transfer controlling stake in three manufacturing plants to an overseas subsidiary. The new company with a capitalization of 1,950 crore rupees will look for international acquisition.

Moser Baer increased 2% to 311 rupees after the company and Norwegian based REC Group have signed silicon wafer sourcing deal for eight years.

Earnings

Largest cigarette maker, Indian Tobacco Company, reported 20% increase in the first quarter earnings to 782 crore rupees, largely on higher prices of its cigarettes. The company sale increased 16% to 3,325 crore rupees. The stock after the news jumped 2.7% to 171 rupees. During the week company also announced a plan to spin off its consumer products group.

Glaxo Smithkline Consumer Healthcare jumped 3.6% to 595 rupees after reporting second quarter earnings of 42 crore rupees on sales increase of 17% to 315 crore rupees.

Decliners

Metals and mining stocks declined on weak metal prices in the international markets. Tata Steel fell 7.9% to 647 rupees, Hindustan Zinc lost 5.5% to 704 rupees, Sterlite Industries declined 4.5% to 628 rupees, and Steel Authority of India lost 5.1% to 147 rupees.

Banking stocks declined in the wake of market loss. Canara Bank led the sector with a sharp loss of 6.3 to 263 rupees, Bank of Baroda lost 3.7% to 292 rupees, HDFC Bank lost 3.5% to 1,175 rupees and State Bank of India lost 3%.

Power and capital good companies fell as well. Bhel plunged 5.2% to 1,665 rupees and L&T declined 4.6% to 2,424 rupees.

Mobile telephone operators were dragged lower 5%. Bharti Airtel lost 3.6% to 892 rupees and Reliance Communications 5.4% to 537 rupees.

Real estate stocks suffered heavily on a day when investors around the world demanded higher interest rates from riskier bonds. Unitech led the sector with a loss of 6% to 557 rupees, DLF lot 4.8% to 602 rupees, and Mahindra Gesco lost 3.7% to 572 crore rupees.

8:30AM New York – Asia and emerging markets suffer the heaviest loss since late February.

Asian markets declined following decline of 2.3% in the U.S. and 3% decline in the European markets. Japan, the largest market in the region, fell 2.3% mirroring losses on Wall Street.

Taiwan led the region with a loss of 4.22% followed by 4.09% decline in Korea. Philippines dropped 3.9%, India declined 3.4%. Hong Kong, Australia, and Indonesia fell 2.8%. Singapore and Thailand dropped 2.4%.

Asian markets have been in the upswing the last five weeks with several markets trading at record levels. India and Philippines have traded at elevated levels on domestic economic strength; South Korea on rising exports and strong commodities prices have lifted Indonesia to a new highs.

Markets in Shanghai had run up 11% in the last five trading sessions and failed to participate in the current sell-off. Chinese government has raised interest rates on bank deposits, tightened the lending rules for real estate but investors continue to pour money into local stocks markets. In the month June, China reported daily new stock trading accounts opening near record level.