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Noon: Markets extend fall to 3% on recovery worries

Noon: Markets extend fall to 3% on recovery worries
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First Published: Mon, Aug 17 2009. 01 44 PM IST
Updated: Mon, Aug 17 2009. 01 44 PM IST
Mumbai: Indian shares extended losses to 3% on Monday afternoon, tracking a broad sell-off across equity markets worldwide on worries about the pace of global economic recovery.
Concerns that poor monsoon rains - crucial for India’s domestic-demand-led economy - will dent growth also weighed on sentiment.
At 1:45pm, the 30-share BSE index was down 3% at 14,941.94 points, with all stocks declining.
The 50-share NSE index was down 3.2% at 4,435.65.
Markets had shed more than 2% in the morning, tailing weak Asian peers as concerns grew a global economic recovery may be rockier than expected after data showed US consumer confidence fell to its lowest since March.
Energy giant Reliance Industries dropped 2.65 to Rs1,981.60, while state-run explorer Oil and Natural Gas Corp lost 1.5% to Rs1,201.75 as oil prices dipped below $67 a barrel, extending the previous session’s 4.3% fall.
Non-ferrous metals producer Sterlite Industries eased 4.1% to Rs635.05 and leading aluminium producer Hindalco Industries slid 3.2% to Rs104.70 as metal prices retreated.
Private-sector lender ICICI Bank, which slipped 2.8% to Rs723, and engineering and construction firm Larsen & Toubro that shed 2.5 percent to Rs1,449 were the other major losers.
“The feeling that the worst is not over for the world is looming large in the minds of investors,” Arun Kejriwal, strategist at research firm KRIS, said.
By 10:50am, the 30-share BSE index was down 2.1% at 15,098.97 points, with 28 stocks declining, after falling as much as 2.2% in early trade. The 50-share NSE index was down 2.05% at 4,485.85.
The benchmark has also been weighed down by worries that poor monsoon rains - crucial for India’s domestic-demand-led economy - will pose a hurdle to a rapid recovery.
Returning to a high growth rate is the greatest challenge facing India, with a weak monsoon making the task harder, but the economy may improve by year-end, Prime Minister Manmohan Singh said in his Independence Day speech on Saturday.
The economy is likely to grow by 6.5-7% in the year to March 2010, a top policy adviser said last week, matching the 6.7% growth in 2008/09, and well below the growth rates of 9% or more in the previous three years.
Traders said the market would be choppy till clarity emerged on the government’s response to the weak monsoon.
In the broader market, losers led gainers 1,236 to 759 on relatively heavy volume of nearly 100 million shares.
Asian shares were lower, with Japan’s Nikkei down 2.9%, while MSCI’s measure of other Asian markets fell 2.8%.
The Reuters/University of Michigan Surveys of Consumers said on Friday its preliminary reading of the index of US confidence fell to 63.2 from 66.0 in July, well below market expectations for a reading of 68.5.
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First Published: Mon, Aug 17 2009. 01 44 PM IST
More Topics: India | Stocks | Markets | BSE | NSE |