ICICI Bank woes drag Indian shares lower

Mumbai: Indian shares fell two per cent to a five-and-a-half month closing low on Tuesday, led by ICICI Bank that said investment losses caused by market turmoil could slice up to nine per cent off this year's profit.

Traders said more banks could face writedowns on their investments following the global markets rout in the wake of subprime crisis.

Shares in ICICI, India's No. 2 lender and the second heaviest stock in the main index, fell as much as 9.3 per cent, before paring almost half of the losses to close 5.2 per cent down at Rs971.60.

The 30-share BSE index fell 2.03 per cent, or 337.99 points, to 16,339.89, with 19 components falling. It fell as much as 3.1 per cent earlier after opening 0.4 per cent higher. It was the index's lowest close since September 19.

The index had dropped 5.1 per cent on Monday, its biggest percentage loss in six weeks, and is off 19.5 per cent so far this year.

Traders expect the broader 50-share NSE index, which closed 1.79 per cent down at 4,864.25, could fall to 4,500 points in the "worst case scenario".

Reliance Industries fell 2.7 per cent to Rs2,241.50, reversing early gains. It has fallen 11.7 per cent in three sessions after the budget.