Reuters logo
Indian shares fall; banks hit by money laundering probe
March 15, 2013 / 10:59 AM / 5 years ago

Indian shares fall; banks hit by money laundering probe

* BSE index falls 0.73 pct; NSE ends 0.62 pct lower
    * Econ support for India ratings has weakened 'somewhat'-S&P
    * BSE falls 1.3 pct for week, posting 6th weekly loss in 7

    By Abhishek Vishnoi
    MUMBAI, March 15 (Reuters) - Indian shares fell on Friday as
private sector lenders were hit after the government and the
central bank said they would investigate allegations of money
laundering practices, while S&P's comments that weaker growth
was constraining ratings also weighed. 
    The finance ministry and the central bank are investigating
allegations of money laundering practices at top private sector
lenders ICICI Bank, HDFC Bank and Axis Bank
, following an investigation by an independent
    Broader sentiment was also hit after an analyst at Standard
and Poor's said the slowdown in India's economic growth was less
supportive for the country's sovereign credit ratings.
    Investors are now gearing up for the Reserve Bank of India's
policy review on Tuesday amid expectations that the central bank
will lower interest rates by 25 basis points. 
    "The central bank will not do more than 25 bps, but what
will be important is what RBI says with respect to its future
stance. I don't think RBI will try to give a sense that they are
going to be outright accommodative," said Dhananjay Sinha,
co-head, institutional research, Emkay Global.
    The benchmark BSE index fell 0.73 percent, or
142.88 points, to 19,427.56.
    The index fell 1.3 percent for the week, marking its sixth
weekly drop in last seven.
    The broader NSE index fell 0.62 percent, or 36.35
points, to 5,872.60, closing below the psychologically important
5,900 level and down 1.22 percent for the week.
    ICICI Bank fell 3.9 percent, while HDFC Bank
 and Axis Bank dropped 1.5 percent and 1
percent, respectively, due to the uncertainty created by the
regulatory probe into money laundering practices. 
    Goldman Sachs said the allegations, if proven, could slow
growth for private sector lenders. 
    Sentiment was also hit after S&P's senior director Kim Eng
Tan said the government may find it challenging to meet the
revenue projections in its 2013/14 budget.
    Among decliners, DLF Ltd fell 4.3 percent, while
Tata Motors Ltd ended down 3.3 percent.
    Bharti Airtel Ltd fell 1.4 percent after the
Department of Telecommunications ordered the company to stop
providing 3G roaming services outside its licensed zones,
according to a source with direct knowledge. 
    Reliance Industries Ltd dropped 1.9 percent after
Kotak Institutional Equities maintained its "reduce" rating on
the stock, saying investors were over-estimating the impact from
a potential gas price hike and the value creation from its
capital spending plans. 
    However, among stocks that gained, Jubilant FoodWorks Ltd
 rose 3.2 percent after Deutsche Bank raised its target
price to 1,300 rupees from 1,260, saying it continued to
"believe in the long-term story and strong runway to growth."
    Titan Industries Ltd rose 5.7 percent on value
buying after declining 12.2 percent this month as of Thursday's
close on concerns over working capital and interest costs.
   For additional stocks on the move double click        
   FACTORS TO WATCH                                             
* Dollar takes a breather, yen steady                     
* Oil above $109 on U.S. recovery hopes, supply worries    
* U.S. growth hopes buoy shares, euro                
* 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      <ECONASIA 

 (Additional reporting by Manoj Dharra; Editing by Subhranshu

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below