Business | Markets
Indian shares fall 2.3 per cent
Indian shares fell 2.3 per cent on Thursday to their worst close in about two weeks, as global financial woes overshadowed a drop in oil prices and expectations for lower inflation.
- Agencies
- Published: 00:30 September 12, 2008
New Delhi: Indian shares fell 2.3 per cent on Thursday to their worst close in about two weeks, as global financial woes overshadowed a drop in oil prices and expectations for lower inflation.
Investors took fright after world equities slipped to their lowest in more than two years, triggering worries of more withdrawals by foreign funds who have been net sellers of about $7 billion this year.
Outsourcing companies such as Infosys Technologies and Tata Consultancy fell as the financial sector turmoil in the US, their biggest market, rattled traders who saw little comfort from the rupee's slide to a near two-year low against the dollar.
"Foreign funds are selling across the board. That is making things more difficult," said R.K. Gupta, managing director at Ta Taurus Mutual Fund.
Problems at US investment bank Lehman Brothers reminded jittery investors the global credit woes were yet to run their course and hit banks across Asia.
Although Indian banks are relatively not exposed to the credit problems, the weak global sentiment is a major dampener, he said.
The 30-share main BSE index fell 2.31 per cent, or 338.32 points, to 14,324.29, its lowest close since August 28, with all but two components falling.
Domestic equity funds saw their first monthly net outflows in 11 months in August when investors pulled out Rs290 million, Morgan Stanley said in a research note on Thursday.
ICICI Bank fell two per cent to Rs686.45 and State Bank of India lost 1.7 per cent to Rs1,538.45. The bank index fell 1.6 per cent.
Latest data showed foreign funds had resumed selling after buying about $187 million on Monday.
Reliance lost 4.1 per cent to Rs1,997.60, its lowest close since July 16.
The NSE index dropped 2.5 per cent to 4,290.30.
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