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India shares drop 6.6% on global recession fears

Indian shares fell 6.61 per cent on Tuesday, their biggest fall in more than two weeks reversing most of the 8 per cent-plus rise of the previous two days as fears of a protracted global recession saw investors pare risk again.

  • Reuters
  • Published: 00:01 November 12, 2008
  • Gulf News

Bangalore: Indian shares fell 6.61 per cent on Tuesday, their biggest fall in more than two weeks reversing most of the 8 per cent-plus rise of the previous two days as fears of a protracted global recession saw investors pare risk again.

Reliance Industries, India's most valuable firm, fell 7.4 per cent to Rs1,207 (Dh100) after having risen more than 11 per cent over two days, while ICICI Bank ended down 7.8 per cent at Rs434.15.

The two stocks, which together account for more than 20 per cent of the main index, contributed most to the market fall.

The 30-share BSE index plunged 696.47 points to 9,839.69, with all but one component losing ground.

Traders said the heavy selling into rallies showed the soft underbelly of the market, which hit a three-year low in October, as slowing economic and corporate profit growth and the broader financial crisis worry investors.

"Fear and panic is still there and investors are rushing to liquidate long positions as soon as the market reverses trend, whatever be the valuations," said D.D. Sharma, vice president at Anand Rathi Securities.

Currency: Rupee at week's low

The Indian rupee closed at its lowest in a week on Tuesday as a sharp fall in the domestic equity market raised concerns of more foreigners repatriating funds, pressuring the currency lower.

The partially convertible rupee closed at Rs48.1250/1400 per dollar, its weakest since November 4, and 1.6 per cent below 47.35/37 at close on Monday. On October 27, the rupee had fallen to a record low 50.29.

- Reuters

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