Indian shares post biggest fall in a week

Bangalore: Indian shares fell three per cent on Saturday in their biggest drop in a week, on concern the US Government's $700 billion bailout package to rescue the ailing financial sector may not be enough to revive the US economy.

"There is complete lack of liquidity in the market as new funds are not coming in and those that are there are withdrawing money," said Neeraj Dewan, director at Quantum Securities in New Delhi.

Infosys Technologies led the fall, losing 5.2 per cent to Rs1,543.35, on growing worries about outsourcing prospects amid a global financial turmoil.

Traders said high oil prices also stoked worries about inflation in Asia's third-largest economy, which imports about 70 per cent of its oil.

"Investors should stay on the sidelines as the volatility is expected to continue for some time and the market will basically move depending on the news flow from overseas markets," Dewan said.

The main 30-share BSE index ended down 3.03 per cent, or 424.65 points, at 13,570.31, after having fallen as much as 3.2 per cent.

It had earlier pared its losses to as much as 0.1 per cent on short covering ahead of futures expiry on Thursday.

All but two of the index's components lost ground.

The BSE index has lost 33 per cent so far this year on foreign fund withdrawals of about $9 billion.

ICICI Bank fell 5.5 per cent to Rs599.70, its biggest single-day fall in a week, on concerns high crude prices will diminish the possibility of monetary policy easing in the near term.

State Bank of India lost 4.1 per cent to Rs1,502.75. HDFC Bank closed 4.6 per cent lower at Rs1,237.70. The 50-share NSE index fell 2.28 per cent to 4,126.90.