Mumbai: Indian shares were down slightly in morning trade, with metals companies among the losers as global equity markets weakened after heightened risk aversion saw investors shift funds to safe-haven assets and markets.
Sterlite Industries and Tata Steel were down 2.1% and 1.9% respectively, and Hindalco shed 1.1%.
“The dollar has changed its direction, hurting base metal prices and in turn metal stocks,” said R. Ganesh, director of Systematix Shares.
Shanghai copper fell to one-week lows and London futures dropped for a fifth day running as investors trimmed positions in riskier assets and pushed the dollar higher on rising sovereign debt troubles.
At 11:56am, the 30-share BSE Index was trading down 0.17% at 17185.66, with 14 of its components declining. The 50-share NSE index was down 0.3% at 5133.50.
Pointing to Fitch’s downgrade of Greece and downwardly revised third-quarter GDP data in Japan, Ganesh said the news flow had been bad around the globe, hurting sentiment.
“But there is a feeling that investors may prefer India as an investment destination as things have turned bad at other geographies like Dubai,” he said, citing Tuesday afternoon’s buying of frontline stocks by funds.
“After all, the money has to go somewhere. The long-term story of India is intact,” Ganesh said.
Top car maker Maruti Suzuki erased steep opening losses and climbed 0.8%. Sources told Reuters Volkswagen AG plans to take a stake of up to 20% in its Japanese parent, Suzuki Motor Corp.
In the broader market, gainers led losers in a ratio of 1.5:1 in a volume of 142 million shares.