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Indian Shares Tumble As US Jobs Data Dents Risk Appetite

4/9/2012 6:55 AM ET

Indian shares fell sharply on Monday, as weak Asian cues on the heels of disappointing U.S. jobs data revived concerns about sluggish economic recovery in the world's largest economy. Also, investors exercised caution ahead of some market-moving events this week, including industrial output due on Thursday and Infosys' results scheduled to be announced on Friday.

The benchmark 30-share Sensex fell by 264 points or 1.51 percent to 17,222, its biggest daily fall in two weeks, while the broader Nifty index ended down 89 points or 1.66 percent at 5,234.

Metal stocks bore the brunt of the selling, with Tata Steel, Jindal Steel, Sterlite and Hindalco falling 3-5 percent, as the sluggish U.S. labor market fueled worries about global growth.

Banks also fell sharply after data showed banks' deposit growth fell short of Reserve Bank of India's projections for the fiscal year ended in March. State-run lender SBI tumbled 2.9 percent, private sector rival ICICI Bank lost 2.3 percent and HDFC Bank shed 0.7 percent. Shares of HDFC, India's largest mortgage lender, ended down 1.7 percent.

Power equipment major BHEL tumbled 3.7 percent, engineering & construction giant Larsen & Toubro fell 3.5 percent, state-run power producer NTPC lost 2.6 percent, Maruti Suzuki, India's largest car maker, declined 2.6 percent, utility vehicles manufacturer Mahindra & Mahindra fell 2.1 percent and state-owned oil explorer ONGC ended down 1.8 percent.

Infosys lost a percent ahead of its results due on Friday, rival TCS fell 1.4 percent and Wipro shed 1.2 percent. Energy giant Reliance Industries slipped 0.6 percent, hit by yet another analyst downgrade on concerns over falling refining margins and reduced output from its KG D6 block.

Unitech fell 2.6 percent on fund raising reports. Mahindra Satyam lost 2.5 percent after Aberdeen Asset Management Plc and some other holders of its American Depositary Receipts sought damages of over $150 million from the company for the losses they suffered due to the 2009 accounting scandal.

Reliance MediaWorks rose 1.7 percent on reports that Big Cinemas, the exhibition arm of the Anil Ambani group company, is in talks for an alliance with Mexico- based Cinepolis.

TD Power Systems soared almost 15 percent as the company said it has signed a long-term license agreement with Siemens AG for technology transfer. HMT jumped 12 percent on reports that the Board of Reconstruction of Public Sector Enterprises has recommended a Rs.950-crore revival package for the company.

Elsewhere across Asia, Japan's Nikkei index fell 1.5 percent as the yen's appreciation following disappointing U.S. jobs data weighed on export-linked shares. The Bureau of Labor Statistics said the U.S. economy added 120,000 jobs in March, the smallest increase since October, while the unemployment rate dropped to the lowest rate in more than three years, mainly because of a decline in the number of people in the labor force.

The yen extended its gains against the dollar to hit a one-month high in Asian trading Monday, as investors exercised caution ahead of more U.S. data and earnings due this week.

South Korea's Kospi average fell 1.6 percent to a one-month low and China's Shanghai Composite index ended 0.9 percent lower, as a lack of directional cues from Europe and the U.S., the disappointing non-farm payrolls report out of the U.S. and data showing a higher-than-expected reading on China's consumer price inflation sparked risk aversion ahead of a slew of economic data from China due this week. Markets in Hong Kong, Australia and New Zealand as well as in Europe were shut for holidays.

Industrial commodities such as copper and oil fell on renewed worries over global economic growth, while gold rebounded on speculation that the Federal Reserve could consider additional quantitative easing, with focus on Chairman Ben Bernanke's speech later in the global day.

by RTT Staff Writer

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