BSE Sensex at 2-mth closing low; Reliance falls

By Ami Shah

MUMBAI (Reuters) - The BSE Sensex dropped 3.1 percent on Tuesday, a sixth straight fall that took it to its lowest close in two months, pulled down by a sell-off in energy giant Reliance Industries and weak global markets.

Disappointing corporate earnings announced over the weekend, including from second-ranked mobile operator Reliance Communications also weighed on investor sentiment.

Reliance Industries fell 5.7 percent to 1,820.65 rupees, its lowest close in nearly four months, ahead of the resumption of a court hearing over terms of a deal to supply gas to Reliance Natural Resources.

"Too many things are bothering Reliance (Industries): bad results, court case and falling refining margins," said Rajen Shah, chief investment officer at Angel Broking.

Reliance Communications fell 5.7 percent to 165.90 rupees, its lowest close in more than seven months, after its quarterly earnings halved and as a crunching call tariff war threatened more pain ahead.

The stock is down over 46 percent since the end of September.

"There is already tremendous pressure on operating margins because of the price war and tariff erosion, and today's fall is a knee-jerk reaction to the results," said K.K. Mital, head of portfolio management services at Globe Capital.

The 30-share BSE index fell 3.1 percent or 491.34 points to 15,404.94, with 27 of components declining.