Mumbai: Indian shares slipped more than 2% lower in early trade on Friday to touch their lowest level in a month, with frontline stocks such as Larsen & Toubro, Reliance Industries and financials leading the decline.
The fall was in line with a sell off in global equities, with Asian markets tumbling after US President Barack Obama threatened tough new restrictions on banks, sending jitters across markets.
“The market was showing fatigue at the top. There are plenty of negatives on market’s mind right now. L&T was disappointing as it is a play on the domestic economy,” said Gajendra Nagpal, chief executive at Unicon Financial Intermediaries.
Top engineering and construction firm Larsen & Toubro extended losses for the second straight session and was down 4.1% at Rs1,462.20. The stock had fallen the most in over six months on Thursday, after it lowered full-year revenue guidance citing project delays.
“Though order inflows for the quarter were strong, poor execution seen over 1HFY10 continues to be a key challenge for L&T,” Goldman Sachs said in a note.
By 10:19am, the 30-share BSE Index was trading down 1.48% at 16,799.60, with only two of its components gaining. The 50-share NSE index was down 1.6% at 5,011.90.
In the broader market, decliners outnumbered advances in a volume of 148 million shares.
Energy major Reliance Industries is expected to report a rise in quarterly profit for the first time in five quarters on higher gas production from its fields off India’s east coast, but markets were jittery ahead of the announcement, due mid-day.
The stock, which has the highest weightage in the main index, was down 1.3% at Rs1,039.65.
Bharti Airtel, India’s top mobile operator, rose early but slipped to the negative despite beating forecasts with a 2.4% rise in quarterly profit, as strong subscriber additions helped offset an intense price war in the market.
The stock was down marginally, but had risen more than 2% after the results were announced.
“We may see weakness for a few more sessions. But buying has emerged from institutional investors on earlier occasions and may happen again. There is a lot of liquidity in the market,” Nagpal said.