India's benchmark BSE index gives up 2013 gains; rupee weighs

Wed Jul 3, 2013 4:39pm IST

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Stocks

   

* BSE index falls 1.47 pct; NSE ends 1.48 pct lower
    * Rupee falls past 60/dollar; worry over capital inflows
    * India cbank to introduce extra provisioning for unhedged
FX exposure

    By Abhishek Vishnoi
    MUMBAI, July 3 (Reuters) - India's benchmark BSE index fell
over 1 percent on Wednesday, as a slump in the rupee reignited
fears of foreign investor selling, while lenders declined after
the central bank mandated them to increase provisioning against
their currency exposure. 
    The falls also tracked global shares as signs of slowing
Chinese growth and escalating political tensions in Portugal,
one of the euro zone's crisis hot-spots, spooked investors.
    
    The benchmark BSE index has now erased its entire
gain for the year and is down 1.28 percent, after hitting a
20,443.62 peak on May 20. The NSE index is down 2.27
percent.
    Indian shares have been hit hard along with other emerging
markets due to fears about an early end to U.S. monetary
stimulus and signs of a weakening Chinese economy. 
    Foreign investors have sold nearly 98.2 billion rupees
($1.65 billion) in domestic shares since the start of June, as
per regulatory data.
    Traders said US non-farm payrolls data due this Friday and
new earnings season that begins next week, with Infosys Ltd
 due to unveil its June-quarter results on June 12 were
the near-term cues to watch.
    "Rupee and global cues created concerns around flows and
recovery but we will be buyers on select basis," said Dipen
Shah, head of Private Client Group Research, Kotak Securities.
    The benchmark BSE index fell 1.47 percent, or
286.06 points, to end at 19,177.76, falling for a second
consecutive session. 
    The broader NSE index fell 1.48 percent, or 86.65
points, to end at 5,770.90, closing below the psychologically
important 5,800 level.
    Housing Development Finance Corp Ltd, where
foreign investors hold almost three-fourth of the company, fell
2.5 percent on outflow worries, while Reliance Industries Ltd
 ended 2.4 percent lower. 
    NSE's banking index slumped 2.2 percent after the
Reserve Bank of India issued draft guidelines that would require
lenders to make higher provisions and increase risk weights on
exposure to companies that have unhedged foreign-currency
exposure. 
    State Bank of India fell 4.6 percent while Bank of
Baroda ended 7.9 percent lower.
    Punjab National Bank slumped 5.1 percent after
Goldman Sachs downgraded the stock to "neutral" from "buy",
citing a weak economic environment and the elevated stress asset
levels at the lender. 
    Bajaj Auto Ltd slipped 1.2 percent as the strike
continued at its Chakan plant in Maharashtra, causing a
production loss of about 20,000 motorcycles for June. 
 
    However, among stocks that gained, Tata Global Beverages Ltd
 rose 1.1 percent after Morgan Stanley upgraded the
stock to "overweight" from "equalweight", citing cheap valuation
and a cyclical uptrend in its international business.
 
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Portugal tension drags euro to 5-week low versus dollar 
* Oil rises on U.S. oil stock decline, Egypt               
* China slowdown, Portugal tensions spook markets    
* 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      
 ($1 = 59.6725 Indian rupees)

 (Editing by Anand Basu)
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