Indian shares fell more than 2 per cent to their lowest in more than three weeks on Wednesday as the prospects of a recession in the United States spooked global markets, with Reliance Industries leading the losses.
Shares in Reliance, India's mostvaluable listed firm, fell 3.2 per cent to 3,059.95 rupees, and ICICI Bank Ltd was down 2.3 per cent at 1,321 rupees. The two stocks account for more than a quarter of the main index.
At 11am, the main 30-share BSE stock index was down 1.59 per cent, or 322.37 points, at 19,928.72, with 24 components falling.
The index fell as much as 2.3 per cent to its lowest since December 24 in early deals.
"The fall is mainly because of the global factors. Our markets had been artificially held up for the last few days despite the weakness in the international markets," said Ambareesh Baliga, Vice-President at Karvy Stock Broking Ltd.
The index is now 1.8 per cent below its 2007 close and six per cent off from its record high of 21,206.77 hit last Thursday.
Asian stocks fell and the dollar hit a two and a half year low against the yen on Wednesday, after a record loss at Citigroup and weak US retail sales entrenched fears the world's largest economy may slide into recession.
All the three major US stock indexes plunged more than two per cent on Tuesday.
Baliga said Indian markets would continue to follow offshore markets in the short term, and the quarterly profit numbers of leading firms such as Reliance, which reports on Thursday, were unlikely to offer much immediate respite.
HDFC Bank fell 4.8 per cent to 1,700 rupees and top lender State Bank of India was down nearly one per cent at 2,390.95 rupees, reflecting the bearish sentiment on financials in global markets.
But shares in Tata Consultancy Services Ltd rose 2.7 per cent to 964 rupees on hopes that the top software services firm would report strong quarterly numbers on Wednesday.
Tata Consultancy is expected to post an 18.7 per cent rise in quarterly net profit, but a strong rupee and prospects of a recession in the United States, which accounts for about half its revenue, are concerns.
Software exporter Wipro was down 1.7 per cent at 452.05 rupees. The firm on Tuesday denied it was in merger or takeover talks with technology consultant Capgemini, after speculation of a possible bid arose late last year.
In the broader market, 1,974 losers led 496 gainers on volume of 98 million shares.
The broader 50-share NSE index was down 1.84 per cent at 5,962.40.
Elsewhere in the region, Karachi's 100-share index fell 0.57 per cent to 13,977.07, and Colombo's All-Share index was down 0.81 per cent at 2,412.94 points. (Reuters)
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