Indian shares fall 3.8 pct as global gloom deepens

* Investors take fright on recession fears in major
economies

* Financials, outsourcers lead fall on fading outlook

* Slide takes losses in main index to 15.2 pct over five
days
(Updates to close)

By Narayanan Somasundaram

MUMBAI, Nov 18 (Reuters) - India's main stock index fell
3.8 percent on Tuesday, taking its losses to 15.2 percent over
five consecutive sessions, as prospects of a global recession
and massive job cuts at Citigroup rattled investors.

Promises by the finance minister the government will take
steps to stimulate the economy to offset the impact of the
global slowdown failed to soothe the sentiment.

Financials led by ICICI Bank (ICBK.BO: Quote, Profile, Research), the country's
second-largest lender, led the fall taking cues from its peers
in regional markets that dropped on fears an economic downturn
could spark defaults.

The stock fell 6.8 percent to 360.75 rupees, its lowest
close in three weeks.

Top lender State Bank of India (SBI.BO: Quote, Profile, Research) slipped 5.1 percent
to 1,108.30 and the sector index dropped 4.5
percent.

The 30-share BSE index .BSESN shed 3.81 percent, or
353.81 points, to 8,937.20, its lowest close since Oct. 27 when
it hit a three-year low of 7,697.39.

"There is consistent selling pressure. The consensus is
building the market would test its previous low," said Rajesh
Jain, chief executive at Pranav Securities.

All but one of the index component fell, while in the
broader market losers overwhelmed gainers in a ratio of almost
3:1 on moderate volume of 226.8 million shares.

The index fell as much as 4.5 percent in early deals and is
down 56 percent so far in 2008 making it one of the worst
performers in Asia.

"We will take steps to stimulate the domestic economy to
compensate for the downside caused by the downturn in the world
economy," Finance Minister Palaniappan Chidambaram told the
World Economic Forum's India Summit on Tuesday.
He said India was likely to end the year with a satisfactory
growth rate, despite the downturn in advanced economies,
although he declined to put an exact number on the expected
rate.

"Next year, we will bounce back to a much better growth
rate," he said, adding growth could reach 9 percent by the
second half of fiscal 2009/10. [ID:nBOM139236]

Analysts were sceptical.

Securities firm Macquarie said India's growth outlook faced
downside risks due to the global financial crisis and gross
domestic product (GDP) growth was seen slowing this fiscal and
the next.

"On our current forecast, GDP growth is poised to fall to a
seven-year low of 6.0 percent in 2009/10, from an estimated 7.2
percent in 2008/09," Macquarie analyst Rajeev Malik said in a
note released on Monday.

Export-driven outsourcing firms such as Infosys
Technologies (INFY.BO: Quote, Profile, Research) fell 4.2 percent to 1,180.95 rupees and
Wipro (WIPR.BO: Quote, Profile, Research) shed 8.8 percent to 229.85 rupees on the
shockwaves in the global financial sector, which provides a
bulk of their revenue.

"There's some more downside left to the market as we have
still not reached the bottom," said K.K. Mital, head of
portfolio management services at Globe Capital.

Citigroup on Monday announced plans to cut 52,000 jobs
globally and HSBC added to the employment gloom on Tuesday,
saying it would cut a further 500 staff in Asia, mostly in Hong
Kong, due to deteriorating economic conditions.
For related stories, see [ID:nSP88524] and [ID:nN17468336].

"We keep hearing bad news from the global financial majors
as well as regulators and experts as the global financial and
economic crisis escalates," brokerage India Infoline said.

"This is unlikely to go away in a hurry and will cap any
sharp movement on the way up," it said.

The broader 50-share NSE index .NSEI closed down 4.2
percent at 2,683.15.

STOCKS THAT MOVED

* Automotive Axles (ATOA.BO: Quote, Profile, Research) fell 11.1 percent to 112
rupees after it said it would shut down operations for at least
a week due to slow demand.

* Binani Industries (BINZ.BO: Quote, Profile, Research) fell 18.9 percent to 32.45
rupees after it cancelled a plan to swap its shares with Binani
Zinc and Binani Cement.

MAIN TOP THREE BY VOLUME

* GVK Power & Infrastructure (GVKP.BO: Quote, Profile, Research) on 16.1 million
shares

* Suzlon Energy (SUZL.BO: Quote, Profile, Research) on 10.3 million shares

* Unitech (UNTE.BO: Quote, Profile, Research) on 7.2 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee falls on stock slide; outflows hurt
[INR/]
* Indian bond yields reverse early rise on rate view
[IN/]
* FOREX-Euro slides on weak shares, grim economy outlook
[FRX/]
* Oil retreats towards $54 after brief bounce
[O/R]
* GLOBAL MARKETS-World stocks fall again in econ, bank gloom
[MKTS/GLOB]
* US STOCKS-Wall St slides on economic worries, Citi
[.N]
* For closing rates of Indian ADRs
INADR
(Editing by Ranjit Gangadharan)