Indian shares fell for a second consecutive session on Thursday, with heavyweight auto, metal and banking shares pacing the declines. The rupee hit a fresh four-month low of 53.45 against the dollar, as overseas investors awaited more clarity on how the government will resolve tax policy issues like GAAR.
India's high fiscal deficit, the perception of a policy paralysis haunting the UPA government for some time now and the slowing economy also weighed on investors' willingness to buy riskier assets.
The benchmark 30-share Sensex ended the session down about 150 points or 0.87 percent at 17,151, while the broader Nifty index fell 51 points or 0.97 percent to 5,188.
Hero MotoCorp plunged 7.7 percent, leading the decliners in the Sensex pack on earnings disappointment, while Tata Motors, Mahindra & Mahindra, Bajaj Auto and Maruti Suzuki fell 1-3 percent.
In the metal pack, Hindalco Industries lost a percent, Jindal Steel shed 2 percent, Coal India fell 2.4 percent, and Tata Steel tumbled 3 percent, as weak economic data from both the Eurozone and the U.S. dimmed prospects for metals demand.
ICICI Bank, India's largest private sector lender, fell 2.7 percent and its public sector rival SBI lost 2.5 percent after the Reserve Bank of India unveiled guidelines for the implementation of the new global capital adequacy norms, called Basel III norms.
Telecom stocks lost ground as top telecom chiefs continued their efforts to persuade the government to reject TRAI's recommendations on 2G spectrum auctions. Bharti Airtel shed 0.9 percent, Idea Cellular edged down 0.4 percent and Tata Teleservices declined 1.6 percent.
Airline stocks tumbled after aviation minister Ajit Singh said the airline industry will likely post collective losses of about Rs 10,000 crore in FY12. Kingfisher slumped 4.3 percent, Jet Airways plunged over 5 percent and low-cost carrier SpiceJet ended down 4 percent.
Property developer DLF lost 2.4 percent, power producers like Tata Power and NTPC fell around 2 percent each, engineering & construction giant Larsen & Toubro declined 1.3 percent and diversified business conglomerate ITC ended down a percent.
Sugar stocks rallied, with Balrampur Chinni, Bajaj Hindustan, Shree Renuka and Dhampur climbing 1-5 percent after the government lifted curbs on sugar exports. Pipavav Defence and Offshore Engineering Company soared 8.5 percent on news that it will establish a joint venture with Mazagon Dock to build warships for Indian Navy.
Marico shed 0.4 percent on reporting a modest 4 percent drop in its quarterly profit. MindTree fell 2.9 percent after appointing Ravi Shankar and Greg Blount to its leadership team.
IRB Infrastructure Developers plummeted 11 percent after the company said the Central Bureau of Investigation has along with several other suspects asked its Chairman Virendra Dattatray Mhaiskar and 2 other company officials to undergo a polygraph test to be conducted in relation to an investigation in the matter of a murder of RTI activist happened in January 2010.
On the global front, other Asian markets ended mostly lower, as fresh signs of economic weakness in the United States and Europe revived concerns over global growth. Investors remained cautious as slower private-sector hiring in the United States stoked fears that similar weakness would be reflected in Friday's closely-watched non-farm payrolls report. The Japanese market was closed for a public holiday.
In Europe, France's CAC 40 and the German DAX index were up more than a percent each, as fairly positive Spanish debt auction results improved risk appetite and investors waited to see if the European Central Bank will announce any fresh bond buying program.
Spain raised 2.52 billion euros from medium-term debt auction, exceeding the 2.5 billion euros maximum target, although borrowing costs were higher than in previous auctions.
by RTT Staff Writer
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