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Indian Shares Tumble In Late-day Selloff

Indian shares tumbled on Thursday, as reports of an alleged coal scam rocked the Parliament, with the Opposition forcing adjournment of both the Houses till noon and subsequently, for the day. The report on the allocation of coal blocks between 2004 and 2009 pegged a Rs 10.7 lakh crore loss to the exchequer, prompting widespread selling across most of the sectors.

However, government auditor Controller and Auditor General (CAG) clarified to the Prime Minister that its draft report on coal mining auction was misleading as the Audit Report is still ''at a very preliminary stage," according to CAG statement on the PMO site.

A drop in rupee value to a nine-week low against the dollar, breaching the 51/dollar mark, and the partial rollback in rail fare hike announced last week in the Rail Budget also spooked investors, dragging benchmark indexes Sensex and the Nifty down to more than two-week lows.

Global cues were subdued with other Asian markets turning in a mixed performance, while the major European averages such as France's CAC 40, the German DAX and the U.K.'s FTSE 100 were down 1-2 percent in early trading, weakening for a fourth straight session on global growth worries.

Data released early in the morning showed that China's manufacturing sector activity shrank for a fifth consecutive month in March, as output suffered a pullback due to weakening domestic demand in the world's second-largest economy, according to a survey by Markit Economics. Separately, data released in the afternoon indicated a sharp fall in French and German factory activity, triggering heavy selling in the late noon deals.

The benchmark 30-share Sensex ended the day down 405 points or 2.3 percent at 17,196, with 28 of its components retreating. Jindal Steel, DLF, Tata Steel, Tata Power, Reliance Industries, ICICI Bank, Larsen & Toubro and SBI bore the brunt of the selling, while Coal India and Hero MotoCorp bucked the downward trend to end 2.4 percent and 0.5 percent higher, respectively. Coal India's board meets today to decide on the fuel supply agreement with power firms.

The 50-share Nifty index fell 137 points or 2.54 percent to 5,228, while the BSE mid-cap and small-cap indexes ended down 2.3 percent and 1.7 percent, respectively.

Shares of Jindal Steel & Power slumped 7.3 percent, Reliance Power plummeted 6.2 percent and Adani Power tumbled 5.2 percent on reports that they were among the main beneficiaries in the alleged coal scam.

Gold loan company Manapurram plunged 18.5 percent and rival Muthoot Finance slumped nearly 10 percent after the Reserve Bank of India tightened rules for lending against gold by non-finance banking companies.

Reliance Capital fell 6.3 percent after the company said it had signed final agreements with Nippon Life Insurance Company to sell a 26 percent stake in its arm, Reliance Capital Asset Management. Unitech lost 6.8 percent on reports that the Group is open to selling its stake in Uninor to joint venture partner Telenor at a fair value.

Mahindra Satyam rallied 3.2 percent and Tech Mahindra climbed 6 percent, extending a two-day rally on merger news.

by RTT Staff Writer

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