Indian shares fell on Wednesday, extending the previous session's sharp sell-off, as the rupee continued its downward spiral, breaching the 56 mark against the dollar amid a weaker euro and persisting domestic concerns over slowing economic growth and a widening fiscal deficit.
With the government blaming the fall in the rupee to global problems, investors are worried that government inaction and unending financial turmoil in the euro zone could spark further sell-offs. The Bharatiya Janata Party today accused the UPA government of misrule over rupee fall and asked if the government will do anything to defend the rupee.
Extremely weak global cues also dented investor sentiment after Greek Prime Minister Lucas Papademos said the risk of Greece leaving the euro is a "real" threat. Key benchmark indexes in Australia, Hong Kong, South Korea, Singapore, Taiwan and Japan fell 1-2 percent on fears of contagion from Greece's political turmoil.
Commodities retreated, the major European averages were down about 2 percent each and the euro hit a 21-month low versus the dollar, as investors exercised caution ahead of an informal meeting of European leaders later in the day, where leaders are expected to discuss new measures to prop up growth, recapitalize faltering European banks and keep Greece in the 17-nation euro.
The summit may also unravel the growing disagreement between Germany and France over eurobonds and on assigning priority to growth over austerity.
Closer home, the benchmark 30-share Sensex ended the session down 78 points or 0.49 percent at 15,948, with 20 of its components retreating. The broader Nifty index fell by 25 points or 0.51 percent to 4,836, while the BSE mid-cap and small-cap indexes ended down 0.4 percent and 0.6 percent, respectively.
Consumer durable, capital goods, realty, metal and auto stocks led the decliners, while export-oriented healthcare and IT stocks witnessed stock-specific buying due to the weakening rupee.
Gail India led the gainers in the Sensex pack, climbing 3.2 percent after it signed a gas sale and purchase agreement with TurkrnenGaz, Turkmenistan's national oil company, to get natural gas through a pipeline. Software services exporters TCS, Infosys and Wipro rose between 0.2 percent and 1.2 percent, while state-run lender SBI gained 0.9 percent. BHEL edged up 0.2 percent after reporting solid Q4 earnings.
Among those that fell, Idea Cellular tumbled 3.5 percent as the telecom major slashed 3G tariffs by up to 70 percent. Rival Bharti Airtel slumped 4.3 percent, Reliance Communication lost nearly 2 percent and Tata Teleservices slid marginally.
Automakers like Tata Motors, Bajaj Auto and Hero MotoCorp fell 1-2 percent as speculation that the government may announce a fuel price hike this week added to concerns over rising import costs amid the rupee's slide.
Tata Power declined 2 percent after posting a Rs.629 crore net loss in Q4 on impairment charge. Canara Bank shed 1.8 percent on disappointing FY12 earnings results.
Great Offshore fell 1.3 percent after denying corporate restructuring reports. Unitech edged down 0.2 percent as the company denied media reports that it was in talks to sell assets to U.S. private-equity firm Blackstone.
Aurobindo Pharma fell 2.2 percent despite news that it has received the U.S. FDA approval for Nevirapine tablets and oral suspension. Adani Enterprises slipped 0.3 percent after it issued a clarification in connection with a media report on SEBI inquiry on HSBC Bank regarding its alleged role in Adani Group companies' stock price manipulation.
Emco rose 2.1 percent on bagging a Rs. 161.2 crore order from NTPC. A2Z Maintenance & Engineering Services climbed 5.8 percent after bulk data available with BSE showed billionaire investor Rakesh Jhunjhunwala and his wife, Rekha, bought 26.5 lakh shares of the company through open market transactions.
by RTT Staff Writer
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