Business | Markets
Indian shares swoon on growth worries
Indian shares shed 2.8 per cent as a slew of weak economic data and shaky European markets rattled investors after last week's deadly attacks on Mumbai.
- Reuters
- Published: 00:41 December 2, 2008
Mumbai: Indian shares shed 2.8 per cent as a slew of weak economic data and shaky European markets rattled investors after last week's deadly attacks on Mumbai.
Shrinking manufacturing activity as well as falling vehicle sales and exports provided fresh evidence of a rapidly slowing economy, which kept alive expectations for easier monetary policy and pushed bond yields to three-year lows.
"People do not have the confidence and commitment. Bad news from the auto sector added to it," said Rajesh Jain, director and CEO at Pranav Securities.
The main share index closed down 2.78 per cent, or 252.85 points, at 8,839.87, as the industry activity in India, China and Europe slumped in November while Japanese officials said their economy was slowing rapidly.
Rajen Shah, chief investment officer at Angel Broking, said foreign institutional investors, who have dumped Indian shares worth $13.7 billion this year, were among the big sellers.
The benchmark, which had risen more than 2 per cent in the morning, has lost 56.4 per cent in 2008, largely due to the foreign selloff.
Trading was largely normal as people reported back to work in the business district in south Mumbai near the site of the militant attacks, although at least one firm was operating out of centres in different parts of the country as a security measure.
A reshuffling of key government posts following the attacks that killed nearly 200 people underpinned sentiment in early trade.
Former finance minister Palaniappan Chidambaram took over as the new home minister after the incumbent resigned, and the prime minister would look after the finance portfolio for now.
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