Bangalore: : Indian shares snapped a two-day rise on Thursday and fell 0.6% as sluggish US economic data dented investor appetite for risk assets across world markets.
Banks and automobiles were among the top losers as domestic concerns resurfaced about high inflation and rising interest rates putting a squeeze on corporate earnings.
Analysts said expectations for good rainfall in the June-September monsoon season, which is vital for boosting farm output and rural incomes in India, helped limit the stocks fall.
Consumer goods leader Hindustan Unilever , which depends on large rural markets for sales, bucked the trend and rose 3.3% on a media report its UK-based parent was said to be on the block.
“The market is showing resilience despite the fall in international markets,” said Gajendra Nagpal, CEO of Unicon Financial.
“Shares were looking to correct after the recent rise, but they have not fallen as much as feared.”
The benchmark 30-share BSE index closed down 0.62%, or 114.63 points at 18,494.18, with 21 components losing ground.
It clawed back from early losses of 1.2% after the weather office said monsoon rains were 12% above normal in the week to 1 June.
The monsoon had hit the country’s southern coast on 29 May, three days ahead of its usual date.
Leading car maker Maruti Suzuki , top truck and bus maker Tata Motors and utility vehicles maker Mahindra & Mahindra lost 2-3% on concern rising borrowing costs could crimp demand.
The central bank is widely expected to raise rates by at least 25 basis points at its review on June 16, after increasing rates by half%age points in May, to stem inflation pressures.
ICICI Bank , the country’s second-largest lender, shed 3.3% and HDFC Bank lost 1.6%, while the sector index dropped 1.8%.
Bigger rival State Bank of India bucked the trend to end 0.2% higher.
Bajaj Auto , the second-largest motorcycle producer that also makes three-wheeled motorised rickshaws, rose 2.5% after reporting a 20% rise in sales for May.
Non-ferrous metals firm Hindalco Industries fell 1.7% as copper extended losses on the London Metal Exchange after US jobs and manufacturing data came in below expectations and raised worries about the health of the global economy. Sterlite Industries Ltd shed 2.2%.
The BSE index is down nearly 10% this year, with foreign fund outflows at $1.16 billion in May on worries about slowing growth.
Data on Tuesday showed the economy grew at its slowest annual pace in five quarters in January to March as rising interest rates crimped consumption and investment, suggesting the central bank may temper the pace of tightening.
Leading software exporters fell on concerns about the recovery in the United States, their biggest market. Tata Consultancy Services Ltd , Infosys Technologies Ltd and Wipro Ltd lost 0.3-1.2%.
Data on Wednesday showed US firms hired far fewer workers than expected in May and output in the manufacturing sector slowed to its lowest level since 2009 leading to economists slashing their forecasts for Friday’s US payrolls reports.
The 50-share NSE index closed down 0.7% at 5,550.35 points. In the broader market on the NSE, 964 losers led 437 gainers on volume of 547 million shares.
By 1116 GMT, the MSCI world equity index was down 0.5%, while the Thomson Reuters global stock index fell 0.4%.
Broadcaster Sun TV slumped more than 31% after media reports said the founder’s brother, India’s textiles minister, was named in a lawsuit related to a telecom probe, further embarassing a coalition government mired in a series of scandals.
It closed down nearly 28% at Rs 272.55. Budget carrier Spicejet , controlled by the minister’s elder brother, shed 16.1% to Rs 34.50.
GMR Infrastructure , which operates the Delhi International Airport, closed 4.1% lower at Rs 33.20 after the Delhi High Court asked the airport to stop collecting development fee from domestic and international passengers.
PBA Infrastructure Ltd rose 9.5% to Rs 69.95 after the company said its joint venture won a Rs 425 crore road project.