Business | Markets
India's main index drops to six-month low
Indian shares fell 3.42 per cent to their lowest close in nearly six months on Friday, taking their losses to nearly 25 per cent in two months as they unwound a massive surge in late 2007 that was sparked by US interest rate cuts.
- Reuters
- Published: 01:09 March 8, 2008
Mumbai: Indian shares fell 3.42 per cent to their lowest close in nearly six months on Friday, taking their losses to nearly 25 per cent in two months as they unwound a massive surge in late 2007 that was sparked by US interest rate cuts.
Leading private bank ICICI Bank, infrastructure play Larsen & Toubro and largest listed firm Reliance Industries contributed most to the fall. The three firms together account for nearly one-third of the main index.
"People are incurring the loss of their life. Every one says just sell," said Pooja Rajani, who runs her own trading firm in Mumbai. "No one expects a rally. All feel it will be down one way."
The market dropped 9.1 per cent over the week, its biggest such fall in almost two years, as fears a US recession and credit market problems would see foreigners sell local stocks, rising inflation and renewed domestic political worries all unsettled investors.
The BSE 30-share index dropped 566.56 points to 15,975.52, taking its losses for 2008 to 21.25 per cent, with 27 stocks falling.
It was the main index's lowest close since September 18, the day the Federal Reserve started cutting US interest rates.
That rate cut triggered $7 billion of foreign buying of Indian stocks in just seven weeks to end-October, powering a rally that eventually took the market to a record high of 21,206.77 on January 10. The market has fallen 24.7 per cent from that peak.
"Currently we are in the middle of all negative news, which is making the downside sharp. Negative cues are coming from the global markets and here nuclear deal is again in the limelight," said Dipak Acharya, a fund manager with BoB Mutual Fund.
The 50-share NSE index fell 3.04 per cent to 4,771.60, its lowest close since September 20.
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