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Indian shares plunge over 3 pct; food bill unsettles investors
August 27, 2013 / 10:54 AM / 4 years ago

Indian shares plunge over 3 pct; food bill unsettles investors

* BSE index falls 3.18 pct; NSE ends 3.45 pct lower
    * FIIs extend selling streak to a seventh day
    * NSE bank index plunges over 5 pct

    By Abhishek Vishnoi
    MUMBAI, Aug 27 (Reuters) - Indian shares slumped over 3
percent on Tuesday, giving up nearly all their gains over the
previous three sessions, as blue chips including HDFC plunged on
worries the passage of a food security bill would worsen the
country's fiscal deficit.
    The falls were accentuated as the rupee plunged to a record
low of 66.075 to the dollar as the 1.35-trillion-rupee ($20.94
billion) bill providing subsidised grains passed by the lower
house of parliament on Monday renewed doubts about the
government's resolve to control spending ahead of elections due
next year.     
    The slump in both shares and the currency also comes after
overseas investors have sold about $810 million worth of shares
in the previous seven sessions through Monday, with global
sentiment weakening further amid uncertainty about the prospect
of military action against the Syrian government. 
    The weak appetite for risk also eclipsed an announcement by
Finance Minister P. Chidambaram that the government had approved
infrastructure projects worth 1.83 trillion rupees ($28.38
billion), a step aimed at reviving economic growth and shoring
up investor confidence.
    Analysts were sceptical about India's ability to attract
funds for infrastructure projects in an economy growing at a
decade-low of 5 percent.
    "There is negative sentiment for emerging markets and
government has to take very strong steps at ground level which
have been missing so far," said Navneet Munot, chief investment
officer at SBI Mutual Fund.
    The benchmark BSE index slumped 3.18 percent, or
590.05 points, to close at 17,968.08, ending its three-day
gaining streak.
    The broader NSE index fell 3.45 percent, or 189.05
points, to end at 5,287.45, closing below the psychologically
important 5,300 level. 
    Blue-chips led the decliners, with Housing Development
Finance Corp Ltd ending down 7.8 percent, while ITC
Ltd lost 3.1 percent.
    NSE bank index slumped 5.4 percent to mark its
lowest close since January 2012 on continued worries over
slowing growth and dimming prospects of RBI reversing its
liquidity tightening measures any time soon as the rupee
continue to make record lows.
    HDFC Bank Ltd plunged 8.1 percent while ICICI Bank
Ltd ended 3.4 percent lower.
    IDFC Ltd slumped 16.5 percent, adding to Monday's
8.7 percent fall, after the Reserve Bank of India on Friday cut
the limit that foreign investors can own in the infrastructure
lender to 54 percent from 74 percent without giving a reason.
     Oil and Natural Gas Corp fell 3.3 percent,
marking a fall of 6.3 percent in two days after it agreed to buy
10 percent in a gas field offshore Mozambique from Anadarko
Petroleum Corp for $2.64 billion. 
    However, among stocks that gained, Dr. Reddy's Laboratories
Ltd rose 0.8 percent, clocking a fourth day of gains
after the company said on Thursday it had launched a key generic
drug which has sales of $194 million in the U.S. 
   For additional stocks on the move double click        
   FACTORS TO WATCH                                             
* Syria jitters buoy yen, Swiss franc; Aussie drops       
* Brent climbs above $111 as tension over Syria rises      
* Syria doubts drive up oil, yen; stocks slip        
* 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 

 (Editing by Sunil Nair)

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