Business | Markets
Financials drag Indian index down as oil rises
Indian shares fell 1.3 per cent per cent yesterday to their lowest close in almost a week, as investor confidence was rattled after oil rose for a third day, fanning higher inflation and borrowing cost worries.
- Reuters
- Published: 23:39 August 27, 2008
Mumbai: Indian shares fell 1.3 per cent per cent yesterday to their lowest close in almost a week, as investor confidence was rattled after oil rose for a third day, fanning higher inflation and borrowing cost worries.
Infosys Technologies bucked the trend, after the company said it was better positioned than other possible bidders for British consultancy Axon Group because its offer had management backing.
The stock rose 0.6 per cent to Rs1,708, a day after easing 0.3 per cent on concern a bidding war could push up the acquisition cost and hurt earnings in the near term.
Financial stocks fell as oil climbed above $117 a barrel, triggering worries the central bank may again tighten monetary policy to douse inflation expectations. India imports about 70 per cent of its oil.
"Investor confidence was shaken in late trade after oil started moving up faster," said Jayesh Shroff, fund manager at SBI Mutual Fund.
The 30-share BSE index dropped 1.28 per cent, or 185.43 points, to 14,296.79, its lowest close since August 21. All but five components fell. The benchmark is down almost 30 per cent this year.
ICICI Bank dropped 2.7 per cent to Rs648.85 while State Bank of India fell three per cent to Rs1,330.90.
Reliance Industries slipped 1.5 per cent to Rs2,147.85, its lowest close since July 29, a day after it said it aimed to transfer an 80 per cent stake in a gas-rich deepwater block to four fully owned units.
"Lack of participation by the foreign funds is making it tough to predict a clear direction. Markets would continue to remain choppy with stock specific action," brokerage India Infoline said in a note.
The 50-share NSE index fell 1.05 per cent to 4,292.10.
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