Mumbai: The Indian equities markets dropped sharply after Satyam chairman and co-founder B Ramalinga Raju revealed that the company was involved in a fraud of about Rs 40 billion over several years.
The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was down 7.25 per cent or 749.05 points to 9,586.88 points after opening higher than the Tuesday's close of 10,335.93 points.
The Satyam scrip took a sharp dip losing 77.69 per cent of its value to close at Rs.39.95 over its close Tuesday of Rs.179.10. A total of 14,30,09,827 shares of the troubled software company changed hands in Wednesday's trade.
At the same time, the broader S&P CNX Nifty index of the National Stock Exchange (NSE) was trading at 2,920.4 points, 6.18 per cent lower.
Other market indices like the midcap and small-cap indices fell by as much as the Sensex. BSE midcap index was trading 7.17 per cent, while the small-cap index fell 6.29 per cent.
“Satyam has indeed dented investor and business confidence with this new revelation,” said Jagannadham Thunuguntla, head of the capital markets arm and director of India's fourth largest share brokerage firm, the Delhi-based SMC Group.
The ripple effect of the Satyam scam was felt across the board as all 13 sectoral indices on the BSE fell sharply with the BSE realty index falling the most.
Heavy offloading was witnessed in the realty, oil and gas and IT stocks.
Top losers in the Sensex were Satyam, JP Associates, RCom, DLF and Reliance Infra.
Top gainers in the Sensex were HUL, Infosys, Maruti and Wipro.
The market sentiment was negative, with 2,104 stocks declining against 421 advances. Fifty-seven stocks remained unchanged.
Asian stocks were a mixed bag with the Nikkei, a key index of the Tokyo Stock Exchange rising 1.74 per cent, while the Hang Seng, a key index of the Hong Kong Stock Exchange, fell 3.37 per cent over its last close.