Mumbai: Indian shares extended losses to 2% on Wednesday afternoon, as renewed worries about the world economy weighed on markets across Asia and Europe.
At 2:41pm, the 30-share BSE index was down 1.8% at 14,695.14 points, with 24 stocks declining, after falling to as low as 14,649.60.
The 50-share NSE index was down 2.4% at 4,408.90.
Markets fell 0.8% on Wednesday, as lower prices of resources and niggling doubts about the health of the global economy dragged down most Asian markets.
Outsourcer Infosys Technologies fell 2% to Rs1,690, while engineering and construction giant Larsen & Toubro dropped 1.9% to Rs1,496.80 on profit-taking after almost tripling over the past three months.
State-run explorer Oil and Natural Gas Corp eased 2.6% to Rs1,094.90 as oil prices slid for the fourth day, while non-ferrous metals producer Sterlite Industries shed 0.5% after Shanghai copper prices fell for the fifth day.
Energy giant Reliance Industries, which has the most weight in the main index, bucked the trend and rose 1.3%, after falling in the previous two sessions following an unfavourable court ruling on gas supplies.
By 11:01am, the benchmark 30-share BSE index was down 0.8% at 14,841.18 points, with 22 stocks declining, after opening up 0.1%.
In the broader section, gainers led losers 1,204 to 878 on relatively moderate volume of 173.8 million shares. The 50-share NSE index was down 0.9% at 4,477.05.
“The market is trading in a band where the valuations are not comforting to many investors. They are staying on the sidelines,” S. Ranganathan, head of research at LKP Shares, said.
Growing optimism about the global economic outlook has brought in almost $8 billion in investments from foreign funds into the Indian market, lifting the main index about 86% from a 2009 low in early March.
The market also received a boost after the ruling Congress-led coalition was re-elected last month, raising hopes that a stronger election mandate may encourage the government to accelerate investor-friendly economic and financial reforms.
But concerns have emerged about expensive valuations, with worries about the global economy and an uncertain outlook for corporate earnings growth weighing on investor confidence. Although the market is vulnerable to bouts of profit-taking on the recent rally, expectations that the government will unveil reform plans in its annual budget on 6 July provide some support, traders said.
“There could be a lot of volatility in the run up to the budget. That is more certain than anything else for this market,” Ranganathan said.
Most Asian markets were lower on Wednesday. Japan’s Nikkei edged up 0.8%, while MSCI’s measure of other Asian markets fell 1.2%.