Indian share prices closed 1.82 percent lower Tuesday amid weak global equity markets ahead of an expected hike in US interest rates, dealers said. They said the broad market fell as local investors squared off positions ahead of the March 31 financial year-end, while overseas investors sold in line with global stock markets ahead of an expected US rate hike. Selling was across the board with most major stocks closing lower, but banking and Tata group stocks faced the brunt of selling, they said.
The Mumbai Stock Exchange's 30-share Sensex index shed 121.24 points to close at 6,535.45.
Shares worth 20.67 billion rupees (472.45 million dollars) were traded, with 2,002 shares down and 428 closing higher.
The US Federal Open Market Committee, due to meet later Tuesday, was widely expected to announce a quarter-point hike in interest rates to 2.75 percent.
"A 25 basis points hike in the Fed rate is factored, but the fear is if it is a 50 basis point hike then there could be a near term flight of money out of here," a local fund manager said.
He said the Sensex was also in a corrective mode given its rally since January when it was around 6,070 levels.
"The Sensex almost went up to 7,000 a few days back and from there it has been falling on technical factors," he added.
Dealers also said local investors continued to hold back on purchases as they closed their annual accounts.
"Many investors borrow funds and invest in the market. Investors have to sell equities to return the funds," Vijay Tilakraj, manager at Cholamandalam Securities, said.
The country's largest bank, State Bank of India, fell 29.45 rupees to 693 rupees, while ICICI Bank lost 15.10 rupees to 395.20 rupees.
Tata Power fell 17 rupees to 359.70 while car and truck maker Tata Motors fell 16.85 rupees to 433.50.
Drug group Cipla lost 10.35 rupees to 26.00 and the country's largest cement company, Gujarat Ambuja, fell 8.60 rupees to 409.40.
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