Mumbai: Indian shares extended losses to 2% on Monday afternoon, as investors cashed in profits after the market jumped 7.5% over the past 1-weeks and as weak overseas peers weighed on sentiment.
At 2:03pm, the 30-share BSE index was down 2% at 15,611.85 points, with 24 stocks declining. The 50-share NSE index was down 1.9% at 4,642.05.
Engineering and construction firm Larsen & Toubro, which fell 1.8% to 1,585.50 rupees, and No. 2 outsourcer Infosys Technologies, which dropped 2.3% to 2,136.50 rupees, led the losses.
Energy giant Reliance Industries, which has the most weight in the main index, dropped 1.1% to Rs2,046.95.
Top telecoms firm Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, slid 0.9% to Rs430.80 rupees.
State-run explorer Oil and Natural Gas Corp bucked the trend and rose 1% to 1,191 rupees, after it said late on Friday it had discovered gas at a block in the north-eastern state of Tripura.
By 10:33am, the 30-share BSE index was down 0.9% at 15,779.30 points, with 23 stocks declining, after falling as much as 1.4%. The 50-share NSE index was down 0.9% at 4,691.20.
“This may be just a temporary blip. As Asian markets are lower, we are also retreating,” Hemant Thukral, vice president at Asian Markets Securities, said.
“We see that there is more interest from market participants, and there may still be some buying left.”
On Friday, the benchmark had gained for the seventh day in a row for the first time in 4-months, and finished at its strongest since 3 August, when it had closed at a 14-month high.
Equity markets worldwide have been boosted recently by a view the global economy was on the road to a sustainable recovery.
The BSE index is up 1.9% in August, having been down more than 6% earlier in the month on worries about a weak monsoon, high valuations and looming inflation.
Having priced in a global upturn, investors are still looking for more signs world growth can be sustained once the impact of massive government stimulus spending fades, some analysts say.
There are also worries stocks may have moved ahead of economic fundamentals and could be due for a correction.
Investors will also be awaiting data on India’s April-June GDP growth, which is forecast to be up 6% from a year earlier. The data is expected at about 11:00am.
India may have seen accelerating growth in the June quarter thanks to stimulus measures, but drought in nearly half of the country’s districts and the global slump could hinder faster recovery.
The fiscal deficit data is due at 4:00pm.
In the broader market, gainers led losers 1,138 to 858 on relatively light volume of 94.7 million shares.
Asian shares were lower, with Japan’s Nikkei down 0.1%, while MSCI’s measure of other Asian markets fell 1.1%.