Mumbai: Indian shares shed 0.6% on Wednesday, with financials leading the fall as the Dubai debt concerns and ratings downgrade of Greece dampened risk appetite and spooked world equities.
Top car maker Maruti Suzuki bucked the trend and rallied 2.5% to Rs1,608.95 after its parent Suzuki Motor Corp said Germany’s Volkswagen will buy a one-fifth stake in the Japanese firm.
Volkswagen will pay $2.5 billion for the holding, which would give it access to the Japanese firm’s expertise in small cars and dominance in India as it seeks to become the world’s top automaker.
“This is an interesting combination that comes with mutual benefits,” said Aizawa Securities analyst Toshiro Yoshinaga. “Suzuki has a solid position in India and the same is true for Volkswagen in Europe.”
The 30-share BSE index closed down 0.59%, or 102.46 points, at 17,125.22, with 18 of its components declining. The 50-share NSE index closed 0.7% lower at 5,112.
Top private sector lender ICICI Bank and mortgage firm Housing Development Finance Corp dropped 1.9% and 2.3% respectively while HDFC Bank fell 1.4%.
Manish Sonthalia, fund manager of portfolio management services at Motilal Oswal, said an overnight decline in bank stocks globally weighed on the sector, but the outlook for the market was upbeat.
“There are expectations the quarterly results will be good, and with rest of the world not faring very good, investors may prefer pouring money into markets like India,” he said.
“The market is due for an upmove to the extent of 10-15% by early next month.”
The BSE index is up more than 77% this year, outperforming the benchmark MSCI Emerging Markets Index that gained nearly 70% and a 29% rise in the MSCI all-country world stock index.
Metals stocks lost ground on the back of falling base metal prices. Copper dropped reflecting losses across the base metals, as investors cut exposure to assets seen as higher risk and as the dollar took on a firmer tone.
Sterlite Industries and Hindalco declined 3% each while Tata Steel fell 4.2%.
IT bellwether Infosys Technologies climbed to its all-time high of Rs2,463, on expectations for better demand outlook. It closed 0.7% higher at Rs2,456.15.
“Infosys’ aggressive steps to expanding its sales and marketing teams clearly indicate that it is readying itself for the future,” brokerage Anand Rathi said in a note on Tuesday, maintaining a buy on the stock.
In the broader market, gainers led losers in a ratio of 1.1:1 on relatively higher volume of 472 million shares.