* BSE index falls 1.56 pct; NSE ends 1.69 pct lower
* Rupee sags to record low despite government steps
* FIIs extend sales in index futures, turn sellers in cash
By Abhishek Vishnoi
MUMBAI, Aug 19 India's NSE index fell nearly 2
percent on Monday to its lowest close in 11 months, as blue
chips slumped after a record low rupee aided fears of foreign
selling and more steps by the central bank to stem dollar
India's benchmark 10-year bond yield also rose to its
highest level in five years, to pre-Lehman crisis levels, as the
rupee fell to a record low of 62.82 to the dollar despite
several efforts from policymakers to arrest the slide.
The rupee's slide has fuelled expectations of more action
from the Reserve Bank of India (RBI), which last week curbed
outflows from companies and individuals, roiling stock and bond
Also, foreign institutional investors (FIIs) extended
selling in index futures for a fourth day on Friday, totalling
sales of 20.63 billion rupees ($334.31 million), indicating they
are bracing for lower levels in cash shares in the near term,
"A depreciating rupee will result in increased costs for
various companies, thereby impacting margins. Thus, even at
lower stock prices, the valuations have not turned appealing,"
said Dipen Shah, head of Private Client Group Research, Kotak
The benchmark BSE index fell 1.56 percent, or
290.66 points, to end at 18,307.52, adding to Friday's 4 percent
fall, marking its lowest close in nearly four months.
The broader NSE index slumped 1.69 percent, or 93.10
points, to end at 5,414.75, marking its lowest close since Sept.
Investors are also waiting to see if minutes of the Federal
Reserve's last policy meeting due on Wednesday will provide some
clarity on when it might start scaling back stimulus.
Blue chips including ICICI Bank fell 5 percent on
fears that foreign investors may pare their holdings in Indian
stocks as the rupee hit a new low.
Among other large cap stocks, ITC Ltd fell 2
percent, while Sun Pharmaceutical Industries Ltd
slumped 4.1 percent.
Bharti Airtel Ltd lost 5.4 percent, weighed down
by concerns over higher foreign currency loans.
Shares in Tata Motors Ltd fell 3.9 percent after
Moody's said the company's shrinking market share in passenger
and commercial vehicle sales was credit negative and would lead
to weaker operating performance.
Axis Bank Ltd plunged 5.8 percent adding to
Friday's 8.8 percent fall after MSCI said it would exclude the
bank from its standard and large-cap indexes.
Titan Industries Ltd fell 2.4 percent after
slumping 12.1 percent on Friday as the central bank banned
imports of gold coins and medallions and required domestic
buyers to pay cash for the yellow metal, among other measures.
However among stocks that gained, technology shares such as
Infosys Ltd rose 0.9 percent as a falling rupee was
seen improving its realisations.
For additional stocks on the move double click
FACTORS TO WATCH
* Dollar steady but ripe for gains before Fed minutes
* Oil above $110 on Egypt unrest, Fed policy worries
* Core debt yields rise, knocking emerging 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.....
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
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
(Editing by Anand Basu)