February 3, 2014 / 11:18 AM / 4 years ago

Indian shares hit 2-1/2 month low as foreign investors sell

* BSE index falls 1.48 pct; NSE ends 1.44 pct lower
    * India's steelmakers fall on weak China factory PMI
    * Profits of Holcim's Indian units may lag estimates -
StarMine

    By Abhishek Vishnoi
    MUMBAI, Feb 3 (Reuters) - India's benchmark BSE index fell
1.5 percent on Monday to its lowest close in nearly 2-1/2 months
as foreign investors continued to sell as part of a slump in
emerging markets, hitting blue chips such as ICICI Bank.
    Although India is seen in a better position than other
countries such as Turkey due to its improved current account
deficit and foreign exchange reserves, the country is being hit
nonetheless.
    Foreign institutional investors sold shares worth a net $93
million on Friday, taking the total sales to $523 million in six
sessions, regulatory data showed.
    Indian markets will thus continue to be beholden to global
risk factors, including concerns about the Federal Reserve's
withdrawal in monetary stimulus and an economic slowdown in
China. 
    Fund investors worldwide pulled $6.4 billion out of emerging
market stock funds in the week ended Jan. 29, marking their
biggest outflows since August 2011, data from a Bank of America
Merrill Lynch report showed on Friday. 
    "I think this EM-led risk aversion could last till
March-end. Probably after that the market would focus on the
political alliances and upcoming elections," said G
Chokkalingam, founder of research and fund advisory company
Equinomics.
    The benchmark BSE index fell 1.48 percent, or
304.59 points, to 20,209.26, closing at its lowest since Nov.
13.
    The broader NSE index lost 1.44 percent, or 87.70
points, to 6,001.80, ending at its lowest since Nov. 22.
    Both indexes posted their sixth fall in seven sessions. 
    Shares weakened even as a survey on Monday showed Indian
factories started 2014 on a high note, with activity growing at
its fastest pace in nearly a year as domestic and overseas
orders increased. 
    Blue chips, which are most vulnerable to foreign selling,
led declines.
    ICICI Bank fell 2.5 percent, while Tata Motors Ltd
 slumped 3.8 percent. 
    Infosys Ltd fell 1.9 percent and ITC Ltd 
lost 1.5 percent.
    Wireless services providers fell on fears of heightened
competition in the mobile spectrum auction.
    Bharti Airtel Ltd fell 2.9 percent, while Idea
Cellular Ltd ended 2.3 percent lower. 
    Indian units of Swiss cement company Holcim fell
ahead of their quarterly-results later in the week. ACC Ltd
 fell 0.7 percent, while Ambuja Cements 
declined 2.5 percent. 
    Steelmakers fell on weak China factory Purchasing Managers'
Index (PMI) numbers, which edged down to 50.5 in January from
December's 51, the National Bureau of Statistics said on
Saturday. 
    JSW Steel slumped 7 percent, while Tata Steel
 declined 3.6 percent.
    However, among stocks that gained, United Spirits Ltd
 rose 3.2 percent after Relay B.V., an indirect wholly
owned subsidiary of Diageo Plc, increased its stake in
the company to 28.77 percent from 26.37 percent on Friday,
exchange data showed. 
    Lupin Ltd surged 4.5 percent after its December
quarter profit grew by 42 percent to 4.76 billion rupees,
beating analysts estimates. 
    
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 (Editing by Subhranshu Sahu)

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