Sensex falls 5th day to 28-month closing low

NEW DELHI Tue Dec 20, 2011 4:21pm IST

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai July 23, 2008. REUTERS/Punit Paranjpe/Files

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai July 23, 2008.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Stocks

   
Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

NEW DELHI (Reuters) - The BSE Sensex fell for a fifth session in a row on Tuesday, dropping 1.3 percent to its lowest close in 28 months, as risk aversion deepened in the absence of policy initiatives to revive slowing domestic growth.

Investor confidence was further dented when European shares initially extended a two-week slide after a euro zone plan to boost crisis funds parked with the IMF failed to reach a hoped-for target.

Engineering and construction conglomerate Larsen and Toubro (LART.NS), which has been facing a slowdown in new orders as companies put off investment in large projects, was among the big losers.

"The whole India story was built around just one word -- growth," said Jagannadham Thunuguntla, research head at SMC Global Securities. "Now that growth is not there and nobody is interested in this market."

The main 30-share BSE index shed 1.33 percent, or 204.26 points, to 15,175.08, its lowest close since August, 2009. All but 5 of its components ended in the red.

Industrial output in India fell for the first time in two years in October, shrinking 5.1 percent, and the central bank held interest rates unchanged last week after 13 rounds of increases since early 2010.

Pushed to a corner by a series of corruption scandals, the ruling coalition has been unable to reach a consensus on policy decisions that are needed to lift investment and growth.

Foreign funds have pulled out a net $300 million from Indian shares this year till last Friday, after ploughing in a record of more than $29 billion in 2010.

"It is tough to find many optimists willing to bet their money on Indian equities at the moment," brokerage IIFL said in a research note on Tuesday.

Swelling fiscal deficit, widening current account gap, high interest rates, slowing economy and policy inaction were driving investors away, it said.

The benchmark BSE index has lost 5.2 percent over five sessions, taking the fall to 26 percent since the start of January and making it the worst performing major stock market in the world.

Larsen & Toubro fell 5.3 percent to 977.70 rupees, its lowest close since May, 2009.

Energy major Reliance Industries (RELI.NS), which has about 10 percent weight on the main index, fell 3 percent and Bharti Airtel (BRTI.NS), the country's largest mobile operator, shed 3.9 percent.

Production cuts announced by European steelmakers this month because of gloomy outlook for steel demand weighed on metal makers.

Tata Steel (TISC.NS), the world's seventh biggest steelmaker, dropped 5.7 percent, while Jindal Steel and Power (JNSP.NS) fell 3.8 percent.

Media firm Network 18 (NEFI.NS) bucked the trend and rose 6.9 percent after a newspaper report Mukesh Ambani, India's richest man and head of oil and gas major Reliance Industries (RELI.NS), is seeking to buy a stake in the company.

A Reliance spokesman said the company was not interested in buying a stake in Network 18.

The 50-share NSE index fell 1.5 percent to 4,544.20.

There were about 2.8 losers for every gainer in the broader market. About 573 million shares changed hands.

At 1030 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent. World stocks, as measured by the MSCI world equity index, rose 0.3 percent.

STOCKS THAT MOVED

* Kingfisher Airlines (KING.NS) fell 1.6 percent after a junior finance minister told lawmakers the troubled carrier has not deposited with the government most of the tax it deducted from its employees' salaries for the last two fiscal years.

* Orchid Chemicals and Pharmaceuticals (ORCD.NS) rose 5.5 percent, after it received an initial milestone payment of $1.5 million, and said it was eligible to receive as much as $100 million.

MAIN TOP 3 BY VOLUME

* Jaiprakash Associates (JAIA.NS) on 28 million shares

* Unitech (UNTE.NS) on 21.6 million shares

* Suzlon (SUZL.NS) on 18.3 million shares

(Editing by Ranjit Gangadharan)

FILED UNDER:

Online Grocery Shopping

REUTERS SHOWCASE

Vodafone Tax Dispute

Vodafone Tax Dispute

India advised against challenging Vodafone tax ruling - source  Full Article 

India-focused Funds

India-focused Funds

India-focused hedge funds up over 40 pct YTD - HFR  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

Falling Oil Prices

Falling Oil Prices

OPEC heading for no output cut despite oil price plunge  Full Article 

SAARC Summit

SAARC Summit

India-Pakistan friction threatens South Asia trade at Himalayan summit  Full Article 

RBI Rate Hopes

RBI Rate Hopes

Markets pricing in rate cut, despite wary RBI  Full Article 

Land Disputes

Land Disputes

Disputes over land for industry on the rise in India, angering locals - charities  Full Article 

Google in Europe

Google in Europe

Insight - Behind Google's Europe woes, American accents  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage