U.S. stocks continued to trade in a bearish mood, extending decline from the selloff in the previous session. Generally positive economic data, showing robust economic growth in Q2 failed to offset losses.

Energy companies led decliners, despite a notable increase in crude oil prices. Chevron (CVX: chart) fell 1.6%, despite reporting a 24% jump in Q2 profit. Sunoco (SUN: chart) and Marathon Oil (MRO: chart) also posted steep losses, falling 3.8% and 5%, respectively.

Sell-off in financial shares continued on concerns that losses in the subprime mortgage market may spill over into the broader market. Citigroup (C: chart) lost 0.9%. Oil-sensitive airlines, housing stocks, natural gas, disk drive, and tobacco stocks also moved significantly lower.

The Dow Jones industrial average was down 89.90 points, or 0.67%, at 13,383.67. The Standard & Poor''s 500 Index was down 9.91 points, or 0.67%, at 1,472.75. The Nasdaq Composite Index was down 15.25 points, or 0.59%, at 2,584.09.


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

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.