Sensex falls to lowest in six weeks as concerns grow

Mumbai: Indian stocks fell, dragging the benchmark index to its lowest in six weeks, on concern mounting bank losses worldwide will deepen the global recession.

ICICI Bank, the nation's second-largest lender, and HDFC Bank, the third-biggest, both declined to their lowest in more than a month.

"We are going to see a lot of volatility in the first six months of the year as the world's biggest economy starts stabilising," said Sanjay Dongre, who helps manage equities at UTI Asset Management in Mumbai., the nation's No 3 money manager. "The stimulus packages of central bankers may work with a lag effect."

The Bombay Stock Exchange's Sensitive Index, or Sensex, retreated 321.38, or 3.5 per cent, to 8,779.17, its lowest since December 5. The S&P CNX Nifty Index on the National Stock Exchange fell 3.2 per cent to 2,706.15.

ICICI fell 6.8 percent to Rs369.35, the lowest since December 5. HDFC Bank, the No 3 lender, slid 2.5 per cent to Rs889.45, the lowest since December 3. State Bank of India, the largest, slid 2.9 per cent to Rs1,081.2.

Meanwhile, the rupee strengthened on speculation some exporters converted their overseas earnings after the local currency fell to a six-week low yesterday.

The rupee climbed 0.2 per cent to 49.13 per dollar as of the 5pm close in Mumbai, according to data compiled by Bloomberg.

It fell to 49.235 yesterday, the lowest closing level since December 8.