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Indian shares fall amid choppy trading
India's main share index shed 0.14 per cent on Monday in choppy trade, with the US government's rescue package for the troubled Citigroup bolstering the market after it fell sharply at the start.
- Reuters
- Published: 23:35 November 24, 2008
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Mumbai: India's main share index shed 0.14 per cent on Monday in choppy trade, with the US government's rescue package for the troubled Citigroup bolstering the market after it fell sharply at the start.
Traders said the $306 billion (Dh1.12 trillion) deal to help Citigroup tackle some of its toxic debt calmed worries the US bank may come under pressure to liquidate some of its large holdings in Indian companies.
However, investors were unwilling to build positions just yet with the outlook marred by concerns of an economic slowdown and as the central bank dragged its feet on an expected easing of monetary policy to support growth.
Financial stocks such as State Bank of India, ICICI Bank and HDFC Bank led the fall as traders had been expecting an interest rate cut over the weekend but it failed to materialise.
"Despite the rescue of Citi by the US government, there is no respite for markets. It is the broader crisis that is engulfing the global economy," said Hitesh Agrawal, head of research at Angel Broking.
Finance Minister Palaniappan Chidambaram said yesterday India's monetary policy was now biased towards stimulating growth in the face of the global financial crisis and the central bank would lower rates once inflation starts slowing.
Backtracking
Addressing economic editors in New Delhi, he said the government may have to revisit and revive pending reforms and hoped credit flows to improve by the end of November or December.
The 30-share BSE index ended down 12.09 points at 8,903.12. It fell more than 2 per cent early and rebounded to be up over 1 per cent after the Citigroup rescue plan was announced, only to backtrack later.
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