Indian shares fell sharply in early trading on Monday, as investors await a discussion on the finance bill in Parliament today and some clarification on the proposed retrospective changes in the tax laws that will have a short-term impact on sentiment.
Adding further pressure, Asian markets are retreating across the board and commodities declined, as poor jobs data raised concerns about the U.S. economy and the outcome of weekend elections in France and Greece increased uncertainty over Europe's efforts to tackle its debt crisis.
Japan's Nikkei average is down 2.6 percent, Hong Kong's Hang Seng index is declining 2.4 percent and the Taiwan Weighted average is down 2.3 percent.
On Wall Street, stocks ended notably lower on Friday, with disappointing jobs data contributing to the weakness. The Dow slid 1.3 percent, the tech-heavy Nasdaq tumbled 2.3 percent and the S&P 500 fell 1.6 percent.
The jobs report from the Labor Department showed that employment increased by 115,000 jobs in April compared to expectations for an increase of about 165,000 jobs. While the unemployment rate edged down to 8.1 percent in April from 8.2 percent in March, the drop was largely due to a decrease in the size of the labor force.
Closer home, the benchmark BSE Sensex is currently down 277 points or 1.65 percent at 16,554, while the broader Nifty index is down 86 points or 1.7 percent at 5,000. Banking, realty, consumer durable, capital goods, metal and auto shares are bearing the brunt of the selling, while healthcare stocks are little changed.
Reliance Industries is retreating 1.6 percent as the oil ministry struck down the company's plan to recover about $1 billion invested to develop its KG D6 block until gas production improves.
Grasim Industries is down 2.2 percent as the Aditya Group firm reported an 8 percent decline in quarterly net profit. HDFC is moving down 0.7 percent ahead of its FY12 results today. Hindalco is retreating 2.4 percent and Asian Paints is down 1.4 percent as they unveil their quarterly results tomorrow.
Ruchi Soya is losing 1.8 percent on allegations it was involved in guar gum price manipulation. Godrej Properties is declining 1.2 percent on reports it is keen on launching as many as 15 projects including new phases in existing projects in 2012-13.
The benchmarks Sensex and the broader Nifty lost around 2 percent each last week after reports said the government was considering reviewing the Double Taxation Avoidance Treaty with Mauritius to raise revenues.
by RTT Staff Writer
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