Stocks fall for third day on Greek contagion woes

Stocks fall for third day on Greek contagion woes

Mumbai: Indian shares dropped for the third straight day to close 0.3% lower on Wednesday, their lowest close in nearly two months, as fears of Greek contagion continued to spook world markets stoking investor risk aversion.

Financials led the decline. Local shares, however, erased some losses as European markets briefly recovered from their earlier lows towards the close of the Indian session.

The BSE 30-share index Sensex closed 0.29% or 49.18 points lower at 17,087.96 points, its lowest close since 9 March. It fell as low as 16,858.23 points intra-day, its lowest level since 3 March. Half of its components lost ground.

The BSE benchmark, which had witnessed a spectacular 81% rise in 2009, has shed more than 2% so far this year.

“Market is going to be turbulent for around one-and-a-half month, taking cues from the development in the eurozone," said Naresh Kumar Garg, CEO of Tata Mutual Fund.

“The problem was not only with Greece, but other European countries as well and there is nothing surprising about it."

Investors fretted the eurozone crisis could curb risk appetite of foreign funds, which could hit inflows into emerging markets such as India.

Foreign funds have pumped $6.6 billion into Indian equities so far in 2010 after a record $17.5 billion inflow in 2009.

“Monsoon will not be a worry this time as it is seen normal, but this (European worries) is a bigger concern," said Garg.

Private sector lenders ICICI Bank and HDFC Bank dropped 1.3% each, while mortgage lender Housing Development Finance Corp closed 0.6% lower.

Top lender State Bank of India recovered and closed 0.2% higher.

Metal makers extended losses as base metals tumbled more. Copper prices slid to their lowest in more than two months as fears of contagion from Greece and worries about Chinese demand prompted investors to retreat from industrial metals.

Tata Steel closed down 0.9%, while Sterlite Industries dropped 3.3%.

Top mobile operator Bharti Airtel rose 2.7% after declining 2.9% over the two earlier sessions.

Export-oriented software companies rose as the rupee hit a one-month low earlier in the day.

Infosys Technologies and Wipro rose 0.8% and 1.7% respectively, while larger rival Tata Consultancy Services closed 0.6% higher.

In the broader market, losers outpaced gainers in the ratio of 1.5:1. The total traded volume, at 455 million shares, was higher than that seen on the previous session.

The NSE 50-share index Nifty closed 0.5% lower at 5,124.90 points.

Elsewhere, the MSCI index of Asia ex-Japan stocks was down 1.8% by 1853 GMT while the pan-European FTSEurofirst 300 was trading 0.1% lower, after rising earlier.

Markets in Japan, Korea and Thailand are closed for public holiday.