Indian shares post biggest 1-day fall in nearly 4-1/2 months
Sunday, 15 June 2014
MUMBAI, June 14 (Reuters): Indian shares slumped nearly 1.5 per cent on Friday, posting their biggest single-day fall in nearly 4-1/2 months as blue-chips such as ICICI Bank fell on risk aversion after crude oil scaled nine-month highs on rising violence in Iraq.
Investors said higher crude oil prices, if sustained, would increase India's subsidy bill and trade deficit, while falls also tracked dampened global equity markets.
India's new government got the best news on the economy in a year on last Thursday, as industrial growth rebounded and retail inflation dropped to a three-month low - signs of an economic revival that could offset the threat of patchy summer rains.
Investors are now waiting for India's wholesale inflation data for May due on Monday and the US Federal Reserve decision on further tapering its bond buyback-led stimulus and indications on interest rates on Wednesday.
"Oil is on boil but for the short term. It may lead to some correction but the market would bounce back," said G Chokkalingam, founder of Equinomics, a research and fund advisory firm.
The benchmark BSE index fell 1.36 per cent, or 348.04 points, to end at 25,228.17, also marking a weekly fall of 0.66 per cent.
The broader NSE index lost 1.41 per cent, or 107.80 points, to end at 7,542.10, closing below the psychologically important 7,600 level, also declining 0.54 per cent for the week.
Both the indexes marked their biggest single day percentage falls since February 3.
ICICI Bank fell 2.1 per cent while Axis Bank slumped 4.5 per cent.
Among state-run lenders, State Bank of India lost 3.5 per cent, Bank of Baroda fell 3.9 per cent while
Punjab National Bank ended 2.5 per cent lower.
Among other blue-chips, Larsen & Toubro fell 2.1 per cent while Tata Steel slumped 4.4 per cent.
NTPC fell 4.3 per cent and Tata Motors lost 2.5 per cent.
Hero MotoCorp lost 4.6 per cent after US private equity firm Bain Capital Partners LLC was seen selling its equity stake worth up to $393 million in India's largest maker of motorcycles and scooters, according to a deal term sheet seen by Reuters.