Sensex at 8-week low as SBI, ONGC slide

MUMBAI, May 17 (Economic Times): Indian shares fell 1.1 on Tuesday to their lowest close in eight weeks after the country's largest lender posted an unexpected slump in quarterly profit, spooking investor confidence that has been hobbled by rising interest ratess. State Bank of India dropped as much as 8.2 after its March quarter profit slumped to 209 million rupees ($4.6 million) from 18.67 billion rupees a year ago, on higher provisions for bad loans. State-run explorer Oil and Natural Gas Corp was another big loser on media reports its share of the fuel subsidy has been increased. The 30-share BSE index shed 1.13, or 207.68 points, to 18,137.35, its lowest close since March 22. Nineteen of its components fell. In the broader market, 1,739 losers were ahead of 1,074 gainers on low volume of about 219.4 million shares. "The market is looking for a trigger, and today there was negative trigger," said K.K. Mital, head of portfolio management at Globe Capital. "The SBI results have dampened overall sentiment in the market, especially in the banking space." State Bank ended down 7.7 at 2,414.70 rupees, its lowest close in more than 22 months. The government-controlled bank said provisions for bad loans in the fiscal fourth quarter rose 49 from a year ago, while operating costs increased 12.5. Other financial stocks also fell after higher-than-expected inflation in April strengthened expectations for another rate increase in June, which would be the 10th rise since mid-March 2010. ICICI Bank lost 1.7, while mortgage lender Housing and Development Finance slipped 0.4. The sectoral index fell 2.2. "Investors are in a wait-and-watch mode. The market will continue to trade in a very narrow range. We don't expect any improvement in sentiment in the near term," said R.K. Gupta, managing director at Taurus Mutual Fund.