Mumbai: Indian stocks extended losses for a third consecutive day as investors concerned about high inflation sold interest rate sensitive stocks fearing further rate hikes. After opening with gains, the benchmark indices lost ground in the second half of the day after data released by the government pointed to a continuing rise in food prices.
India’s food price index accelerated to 8.04% for the week ended 23 June due to costlier fruit and vegetables. The price index rose 7.33% in the previous week. Read more...
Sensex: 17,693 –1.38%
Nifty: 5,331 –1.35%
Ranbaxy, Reliance Capital and Mahindra & Mahindra led the losses in the Nifty shares. Mahindra & Mahindra slumped as much as 4% after the weather office said India’s monsoon rainfall fell below normal for a second straight week.
Investors sold Mahindra & Mahindra stock on fears that weak rainfall might impact the company’s tractor sales.
Ranbaxy: Rs 532 –4.1%
Reliance Capital: Rs 514 –4.0%
Mahindra & Mahindra: Rs 680 –4.0%
At the sectoral level, real estate, automobile, FMCG and metal stocks led the losses on the BSE. Weak monsoons and concerns about the impact of high interest rates on corporate earnings led to broad based selling. All BSE sectoral indices closed the day with losses.
BSE Realty: 1,950 –2.2%
BSE Auto: 8,475 –2.1%
BSE FMCG: 3,976 –1.8%
BSE Metal: 13,388 –1.8%
Investors sold automobile shares on concerns of rising competition and interest rates. While increasing competition is expected to put pressure on margins, high interest rates are expected to weigh on sales.
Ashok Leyland: Rs 24 –2.8%
Bajaj Auto: Rs 1,419 –2.5%
Tata Motors: Rs 913 –1.6%
Maruti Suzuki: Rs 1,200 –1.2%
Meanwhile, stocks of state-run oil marketing companies rallied on prospects of low under-recoveries. Brent crude in the international markets fell 0.71% to $112.43 a barrel on concern that a recovery in the US economy is faltering. Read more...
HPCL: Rs 392 +4.0%
Indian Oil Corporation: Rs 329 +3.5%
BPCL: Rs 685 +3.2%
Overall, 57.36% of the shares traded on the BSE closed the day with losses.