Mumbai: Markets extended losses to 1.3% on Tuesday after government data showed May industrial output in Asia’s third largest economy rose a slower-than-expected 5.6% from a year earlier.
At 11:10am, the 30-share BSE index was down 1.05% at 18,526.58 points, with 24 components declining. It was down 1% before the data was released. The 50-share NSE index was down 1.01 percent at 5,559.45 points.
Infosys Ltd, India’s No. 2 software services exporter, reported a 15.4% rise in fiscal first-quarter profit as a surge in wages offset strong demand from western clients. .
“The outlook is bearish. We could see some weakness for at least a couple of days, until we see some good results,” said Arun Kejriwal, director at research firm KRIS.
Asian equities suffered sharp losses on Tuesday while the euro remained under pressure on escalating worries that the threat of contagion from the Greek debt crisis could lead to more countries requiring financial aid.
Stock markets in Australia, , Japan and South Korea lost between 1.35% to 2.1%, while the MSCI index of Asia-Pacific shares outside Japan fell more than 2%.
“The pace at which we went up was something which was unsustainable, the main reason for the rally that we saw was not anything else but because of the fact there was money coming in from foreigners and that pushed the market up,” Kejriwal said.
Foreign funds have poured over $2.57 billion in local equities over the last 12 sessions until Friday, data from the market regulator showed, helping the main index rise for three consecutive weeks.
Tuesday’s tumble came despite Infosys maintaining its dollar revenue growth forecast at 18-20% for the fiscal year ending March 2012. Its shares fell nearly 6%.
Also leading the fall was ICICI Bank , India’s second largest lender. The broader banking index was 0.7% lower as concerns remained on hardening interest rates and slowing economic growth.
Investor focus is on India’s May industrial output data due at 11:00am.
India’s industrial output probably rose 8.2% in May from a year earlier, on a favourable statistical base effect and strong exports and infrastructure growth, the median forecast in a Reuters poll showed.
Losers beat gainers 857 to 374 on a volume of about 99.97 million shares in the broader market.
Shares of Essar Oil rose nearly 3%, a day after the company reported a net profit of Rs 469 crore as against a loss of Rs 70 crore the year ago.
Separately, UBS said in a note the company’s refinery expansion is on schedule to be completed by September 2011.
Shares of Madras Cements rose nearly 5% after the Times of India reported that the company is in talks with Lafarge and Holcim to divest its cement grinding unit.