* BSE index falls 0.41 pct; NSE ends 0.36 pct lower * Bharti Airtel falls; regulatory concerns resurface * Reliance Capital partners with Japanese firms for banking licence By Abhishek Vishnoi MUMBAI, June 26 Indian shares fell on Wednesday as blue chips such as Tata Motors declined after the rupee slumped to a record low, escalating worries foreign investors may exacerbate outflows and dimming chances of a rate cut by the Rerserve Bank of India. The rupee breaching the key psychological level of 60 to the dollar has worsened fears about the country's current account deficit and complicated the task for policy makers looking to revive an economy that grew at its slowest in a decade in 2012/13. The falls in the rupee also led to a slump in bond prices , indicating receding bets the central bank would cut interest rates in a country still faced with the prospect of losing its investment-grade rating. In recent months, the reform process has sputtered, taking some of the shine off India for investors, with FIIs selling shares worth 105.50 billion rupees ($1.77 billion) in 11 consecutive sessions to Monday. "Continued weakness in the rupee and FIIs selling in equities is creating a negative mood in the market, as investors are apparently selling on every rally," said Rakesh Goyal, senior vice president at Bonanza Portfolio Ltd. The benchmark BSE index fell 0.41 percent, or 77.03 points, to end at 18,552.12, ending near its lowest close in 2 months, hit on Monday. The broader NSE index fell 0.36 percent, or 20.40 points, to end at 5,588.70, closing below the psychologically important 5,600 level. Blue chips hit by the rupee slump include Tata Motors Ltd which fell 3.1 percent and Larsen and Toubro Ltd that ended 1.1 percent lower. Among lenders, HDFC Bank Ltd declined 1.8 percent while ICICI Bank Ltd fell 0.7 percent. Bharti Airtel Ltd fell 6 percent as regulatory concerns resurfaced ahead of a ministerial panel meeting on mobile spectrum auction later in the day. Jeweller Gitanjali Gems Ltd slumped 9.99 percent, hitting its daily lower limit for a third consecutive day, on fears the government would unveil more curbs to restrict the supply of gold. The stock's three-day fall wiped out 19.54 billion rupees ($327.36 million), or half of its market capitalisation. Another jewellery maker, Rajesh Exports, fell 1.6 percent after its chairman told Reuters the company expects sales and earnings to grow at 10 percent in the current financial year to March, sharply slower than expected earlier, because of government measures to curtail gold imports. India's Bajaj Auto fell 0.7 percent after it said it expects output at one of its plants in western India to drop by a third in June and July due to an employee strike that began on Tuesday. Among stocks that gained, Reliance Capital Ltd rose 2.2 percent after company said it would apply for a license to enter mainstream banking in the country in partnership with Japan's Sumitomo Mitsui Trust Bank and Nippon Life Insurance of Japan. For additional stocks on the move double click FACTORS TO WATCH * Euro falls to three-week low vs dollar * Brent slips as US data backs Fed stimulus cut strategy * Soothing c.bank talk steadies shares * Foreign institutional investor flows * For closing rates of Indian ADRs ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea... S.E. Asia....... Hong Kong... Taiwan.... Australia/NZ.... India....... China..... OTHER MARKETS: Wall Street .... Gold ....... Currency.. Eurostocks..... Oil ........ JP bonds... ADR Report ..... LME metals. US bonds.. Stocks News US.. Stocks News Europe DIARIES & DATA: Indian Data Watch Asia earnings diary U.S. earnings diary European diary Indian diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news, double click on: U.S. company news European company news Forex news Global Economy news Technology news Telecoms news Media news Banking news Politics/General Asia Macro data <ECONASIA (Editing by Anupama Dwivedi)
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