Markets extend losses to 1%; Infosys drops

Markets extend losses to 1%; Infosys drops

Mumbai: Indian shares extended losses to 1% on Monday afternoon, with Infosys Technologies and Reliance Industries leading the decline, after European markets opened lower.

At 12:59pm, the 30-share BSE index was down 0.97% at 17,387.90 points, with 25 components falling. The 50-share NSE index was down 1% at 5,224.40.

China’s tightening moves and a survey that showed India’s manufacturing in April expanded at a slower pace for the second month following a drop in new orders and output also added to the shaky sentiment.

Infosys Technologies, which gets most of its revenue from the United States, shed 1.3% after the US economy grew 3.2% in the first quarter, below expectations.

Automobile stocks such as Maruti Suzuki and bike maker Bajaj Auto bucked the trend and rose following robust April vehicle sales.

By 11:38am, the 30-share BSE Index was trading down 0.56% at 17,459.92 points, with 25 of its components declining.

The benchmark had eked out a 0.2% gain in April, after rising 6.7% in March and 0.4% in the month before.

Traders said euro zone debt troubles were a concern as they could slow down foreign portfolio investment, which has been a key driver for the market. Overseas funds have moved about $6.5 billion into Indian shares so far this year.

The emergency aid for Greece, the most ever for a country, alleviated some fears of a near-term sovereign debt default, but left investors wondering which fiscally vulnerable country in Europe might be next.

“The fear is that more European countries may fall into the debt trap. People are just worried -- who next and what next," said R.K. Gupta managing director of Taurus Mutual Fund.

“That said, it does not seem like we will hear big names coming into trouble."

Bajaj Auto, the No.2 motorcycle maker, was trading up 0.8% after its April sales jumped 85%. Bigger rival Hero Honda was up nearly 1% after its sales nudged up 0.3%.

Maruti rose 0.6% after the leading car maker said April sales rose 29.7%.

In the broader market, losers outnumbered gainers in a ratio of 1.1:1 in a volume of 145 million shares.

The 50-share NSE index was down 0.7% at 5,243.50.