Markets at 8-week closing low; metals fall

Markets at 8-week closing low; metals fall

Mumbai: Indian shares fell 1.4% on Tuesday to their lowest close in eight weeks, dragged by metals makers as worries China’s robust appetite may falter sent prices sliding in London.

A drop in European stocks on concerns over Greece’s bailout added to the shaky sentiment, after the market had rebounded from a lower start in the morning.

Base metal prices tumbled in London with copper hitting seven-week lows on worries China may tighten monetary policy further and cause demand to thin from the world’s top consumer of many base metals.

Tata Steel, the world’s eighth-largest steel maker by output, dropped the most in more than three months as it closed 4.9%t lower. Non-ferrous copper producer Sterlite Industries fell 4.2%t, its biggest fall in 2010.

Aluminium maker Hindalco shed 5.8%t, the most in three months.

The 30-share BSE index fell 1.43%t, or 248.94 points, to 17,137.14, its lowest close since 10 March. Twenty-eight of its components closed in the red. The 50-share NSE index was down 1.4%t to 5,148.50 points.

“People are concerned about demand from China which is why metals declined. Also, European markets are in the red," said Neeraj Dewan, director of Quantum Securities.

“There is nothing positive in the near term to drive our market up."

On Monday, state utility SJVN’s IPO to raise up to $240 million was fully covered on the final day, but foreign investors mostly stayed away from the sale, pointing to a tough environment for planned offerings in state firms.

Meanwhile, private sector road builder Jaypee Infratech’s IPO to raise up to $530 million, was subscribed 1.1 times by 2:00pm, data from the stock exchange data showed.

Foreigners have pumped $6.6 billion into Indian equities so far in 2010, including in the primary market, but the main index is down 1.9%t during the period.

In 2009, the index had jumped 81%t on the back foreign inflows of a record $17.5 billion.

Financials reversed early gains with top lender State Bank of India dropping 0.8%t, while rivals ICICI Bank and HDFC Bank shed 2.4%t and 1.5%t respectively.

Mortgage lender Housing Development Finance Corp, which announced 5:1 stock split on Monday, bucked the trend and closed 0.5%t higher.

In the broader market, losers outpaced gainers in the ratio of 2.7:1 on volume of 420 million shares.