Markets down 4th day; worst close in nearly 8 weeks

Markets down 4th day; worst close in nearly 8 weeks

Mumbai: Indian shares continued to fall for the fourth day in a row, and closed 1.4% lower in volatile trade on Thursday to their worst close in nearly 8 weeks, pulled down by weakness in world equities on concerns over global growth.

World stocks hit a three-week low as European corporate results disappointed and weak US data rekindled worries about the strength of the economic recovery.

The 30-share BSE Index closed 1.42% or 230.77 points lower at 16,052.72, with 22 of its components declining. Trade was volatile as monthly derivatives contracts expired. The 50-share NSE index closed down 1.57% at 4,750.55.

The index slipped below the 16,000 mark in early deals, for the first time since 7 September.

“Fall in global markets and liquidation by some institutions hit our market today," said Ambareesh Baliga, vice-president at Karvy Stock Broking.

Foreign funds have infused more than $14 billion in Indian equities so far this year, powering a rally of 66%.

However, the benchmark has shed over 4 percent so far in the week, and is down over 6 percent this month, on concerns over the speed of recovery, and as the central bank set a hawkish tone at its policy review this week.

“If Nifty manages to hold around 4,730, it may stabilise for a while. But if that level is breached we may fall by 400 points more," added Baliga.

“Globally, the economic data is yet to indicate recovery," said K. K. Mital, head of portfolio management services at Globe Capital.

Banks continued to reel under pressure, on worries their profits would be hurt after the central bank raised the provision ratio for bad debts in its credit policy review.

Top lender State Bank of India declined 1.05% to Rs2,195, while private lender ICICI Bank shed 4.8% to Rs771.25.

Sesa Goa erased early losses and closed 1.5% higher at Rs300.10. Shares had fallen to as much as Rs278.15, after the miner said it was being investigated by the Indian government for financial irregularities.

Most outsourcers edged lower on concerns they could be over-valued after the recent run-up, dealers said.

The sector index is still up 2.5% since 9 October, when Infosys announced its quarterly results. Sector leader Tata Consultancy fell 1.5% while Infosys shed 2.2%.

Top-listed real-estate firm DLF closed down 6.8% at Rs375.60.

“DLF is still trading at a very high premium to its NAV. So, when the broader market fell, the stock reacted a little more to move towards its fair value," added Baliga.

Top utility vehicles maker Mahindra & Mahindra rose 3.9% to Rs927.75, after it said its September quarter net profit nearly trebled helped by cost cuts and strong sales.

Energy giant Reliance Industries closed 1.6% lower, while state-run explorer Oil & Natural Gas Corp jumped 2.6% ahead of their quarterly earnings announcement.

In the broader market, losers were more than double the number of gainers in a moderate volume of 382 million shares.