Indian shares drop

Indian shares dropped 0.2 percent in a choppy session on Thursday, with financials leading the fall, reflecting world markets which weakened on US Federal Reserve's cautious stance on economic recovery. Weak monsoon rains in Asia's third-largest economy also dampened sentiment. A director and spokesman of the weather office told Reuters rains were unlikely to revive significantly in the next week.
Financials led the losers with the banking sector index dropping 0.3 percent after gaining 5.2 percent over past five sessions. Mortgage lender Housing Development Finance Corp, which reported a 23-percent jump in its June-quarter net profit, dropped 1 percent. HDFC's core business momentum remains brisk, but its valuations appear full, HSBC said in a note.
Leading lender State Bank of India and rival ICICI Bank dropped 1 percent each while HDFC Bank shed 1.2 percent. The 30-share BSE index dropped for the second day as it closed 0.16 percent or 28.70 points lower at 17,909.46, with 16 of its components losing ground.
For the year to date, India's benchmark index is up 2.5 percent, while MSCI's measure of Asian shares other than Japan has dipped nearly 4 percent. The emerging markets index has shed 2.8 percent so far in 2010. Foreign funds have poured in $8.2 billion into Indian equities this year, data from the exchange regulator showed.
India has accounted for 59 percent of the net foreign buying seen so far in 2010 in emerging Asia, excluding China and Malaysia, Credit Suisse said in a note. Top mobile operator Bharti Airtel was down 0.9 percent on persistent worries about shrinking margins and rising competition at home.
Reliance Communications declined 1.5 percent after The Economic Times newspaper reported the telecom operator may have to lower the value of its tower assets being sold to GTL Infrastructure. ONGC closed 1.6 percent lower while BPCL, HPCL and IOC shed between 3.8 percent and 6.2 percent.
IT bellwether Infosys Technologies gained 0.6 percent after disappointing quarterly earnings had sent the stock down 5.3 percent over past two sessions. In the broader market, declining shares outnumbered advancing ones in the ratio of 1.1.1 on a relatively lower volume of 354 million shares. The 50-share NSE index closed 0.1 percent lower at 5,378.75 points.