Indian shares at six-week low

Indian shares fell 2.4 percent on Tuesday to its lowest close in nearly six weeks after the central bank raised interest rates by a hefty 50 basis points, triggering concerns the aggressive tightening will dent corporate earnings. The benchmark stock index also extended slide to a seventh consecutive session, its longest losing run since November 2008.
The rate increase was sharper-than-expected and the central bank signalled it would battle stubbornly high inflation even at the "This could eventually taper down expectations for corporate earnings, and hurt the market sentiment," said Deven Choksey, managing director and CEO of KR Choksey Shares.
The 30-share BSE index fell 2.44 percent or 463.33 points to 18,534.69, its lowest close since March 24. Only one of its component managed to close in the green. Financials led the fall, with the banking sector index dropping 3.1 percent. Expectations for rate increases for the remainder of 2011 have jumped by 50 basis points after the central bank's move on Tuesday, a snap poll found.
The 50-share NSE index slid 2.4 percent to 5,565.25. Losers were more than five times the number of gainers, while 618 million shares changed hands on the NSE, lower than its 90-day daily average volume of 645 million shares. Foreign funds which have invested a net of more than $3 billion in Indian equities since the start of March, have been net sellers for the last five trading sessions in April, triggering concerns this could turn into a near-term trend.
Top lender State Bank of India fell 4.2 percent, while rivals ICICI Bank and HDFC Bank slipped 2.3 percent and 2.5 percent respectively. Other rate sensitive sectors such as real estate and automobile also took a beating. Top-listed real estate firm DLF dropped 2.4 percent. Automobile majors Tata Motors, Maruti Suzuki, Mahindra & Mahindra and Bajaj Auto fell between 1.2 percent and 4.8 percent. Jaiprakash Associates tumbled 8.7 percent after Goldman Sachs downgraded the stock to neutral from buy. "We see limited areas of potential positive surprise as high debt levels remain a concern on earnings," Goldman said.