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Markets extend losses to 1% on global slide

Markets extend losses to 1% on global slide
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First Published: Tue, Jun 01 2010. 01 00 PM IST
Updated: Tue, Jun 01 2010. 01 00 PM IST
Mumbai: Indian shares extended losses to 1% in afternoon trade on Tuesday after European markets opened weaker on doubts over the pace of global economic recovery and worries about euro-zone banks facing another wave of write-downs.
Energy major Reliance Industries and private sector lender ICICI Bank were among the major losers. At 12.46pm, the 30-share BSE index was trading down 1.02% at 16,772.62 points, with 23 of its components losing.
The 50-share NSE index was down 1.24% at 5,023.25.
Shares slipped in the morning tracking their Asian peers and on concerns the domestic economy could face challenges in the coming months as the government rolls back stimulus measures and raises rates.
Financials led the losses, while automobiles bucked the trend with leading car maker Maruti Suzuki rising as much as 2.9% after it said May car sales were its highest-ever in a month.
The main 30-share BSE index was down 0.61% at 16,841.39 by 0457 GMT, with 19 components in red. The wider 50-share NSE Nifty index was down 0.67% at 5,052.20.
“High inflation, sluggish private consumption and a softening stimulus are some of the key concerns. Interest rates will also head north though at a gradual pace,” brokerage India Infoline said.
Official data on Monday showed the economy grew an annual 8.6% in the March quarter, the fastest pace in six months, thanks to government and consumer spending.
Growth is expected to be 8.5% in the current year that started on 1 April, finance minister Pranab Mukherjee said after the data was released.
Traders said the forecast was probably optimistic. “That could be a touch ambitious given the emergence of a few headwinds,” India Infoline wrote in a note.
Leading private sector lender ICICI Bank fell 1.9%, while mortgage lender Housing Development Finance Corp lost 1.4%.
Auto makers rallied. India has been one of the few bright spots for auto sales, helped by improving consumer spending, though rising costs is a concern for the companies.
Maruti Suzuki was trading 1.6% higher at Rs1,257, while Mahindra & Mahindra added 0.5% to Rs575.40.
Metal stocks Hindalco and Sterlite Industries fell as London copper futures slipped after a bank holiday, and also weighed down by warnings from the European central bank and China about economic recovery.
A survey showed India’s manufacturing sector expanded at its fastest rate in more than two years in May, bolstered by steady growth in output, new orders and employment.
In the broader market, there were 1,391 gainers for 908 losers on relatively low volume of about 106 million shares.
Elsewhere in Asia, stocks fell with creeping suspicion that a peak in the recovery has passed and slowing growth in China and Europe in the second half of the year will be obstacles to risky trades.
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First Published: Tue, Jun 01 2010. 01 00 PM IST
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