Mumbai: Shares were on course for a second weekly fall as they erased early gains and dropped 0.4% on Friday, with investor confidence dented by rising domestic interest rates and the debt woes in Greece.
Tata Steel bucked the trend and climbed 2.6% after the steelmaker agreed late on Thursday to sell its 26% stake in Australia’s Riversdale to Rio Tinto for $1.1 billion.
Leading car maker Maruti Suzuki initially rallied 3.3% after a 13-day strike ended, but soon faltered and was down 0.3% as the workers agitation at Manesar plant had caused a production loss of more than $90 million.
At 10:50 am, the 30-share BSE index was down 0.44% at 17,906.10 points after rising 0.4% early. It is down 1.9% for the week.
Twelve of its components declined.
“There is still more pain to come. Globally, developments are not good,” said Sunder Subramaniam, senior manager of sales at brokerage Sharekhan.
“The index heavyweights like Reliance Industries, Infosys -- are dragging, which are a worry.”
The Reserve Bank of India (RBI) raised interest rates on Thursday for the 10th time in just over a year to combat stubbornly high inflation and signalled more increases to come even as growth in Asia’s third-largest economy is slowing down.
Foreign funds have pulled out $235 million from Indian equities over four sessions to 15 June, due to slowing growth concerns in Asia’s third largest economy.
The 50-share NSE index was down 0.4% at 5,375.50.
Losers and gainers were nearly equal in number in the broader market, with 31 million shares traded on the NSE.
Export-focused software companies led the decline on worries a gloomy world economic outlook could hurt their revenue. Tata Consultancy Services and Infosys Technologies fell 0.5% and 1.1% respectively.
Energy giant Reliance Industries fell as much as 1.3% to Rs875.60, its lowest level since 13 July 2009, on lack of positive triggers, dealers said.
Investors were also watching the progress of monsoon after the weather office said on Thursday rains were 9.0% below normal in the week to 15 June.
The monsoon, vital for farm output in India’s trillion-dollar economy, hit the country’s southern coast on 29 May this year, three days ahead of schedule.
The MSCI’s measure of Asian markets other than Japan was down 0.7% while Japan’s Nikkei dropped 0.6%.
Stocks on the move
• ING Vysya Bank gained nearly 1% to Rs332.50 after the lender said it had raised Rs513 crore through a share sale to institutional investors.
• Engineering and construction firm Larsen & Toubro extended losses and slipped 0.2% to Rs1,675.20, on concerns slowing economic growth could hurt its order inflow.