Scam-hit stocks get battered

Nov 27, 2010 |

Correspondent

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Mumbai, Nov. 26: Panic selling following margin calls by brokers on Friday added to the weakness that persisted in the markets ever since the 2G scam and then the bribes for loans scandal broke out on Wednesday.

The markets have lost nearly 1,800 points since Diwali. Apart from the stocks of entities directly involved in the bribery, investors hammered down stocks across the board.

Liquidity dried up in the markets and stocks like Core Projects plunged over 38 per cent intra-day and Garware Offshore too fell 20 per cent but both recovered to close down 7.16 per cent and 1.91 per cent respectively.

Central Bank of India which closed positive on Thursday fell 10 per cent while LIC Housing was down 11 per cent. One of the worst hit was HCC, the main promoter of Lavasa along with Venkatesh Hatcheries and others.

The ministry of environment sent the company a show cause notice and put a stay on all construction activity at its showpiece at Lavasa which is spread over 12,000 acres. This puts its proposed `2,000 crore initial public offer (IPO) in jeopardy as Lavasa has a debt of `1,500 crore on an income of `482 crore.

The Sensex closed down 181.55 points at 19,116 and the Nifty was down 47.80 points at 5,751.95.

Investors are panicky as after several scams there may be a downgrade of stocks and the overallmarkets.

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