Indian shares fell more than 1 percent on Tuesday to their lowest close in nearly six weeks, as renewed worries about the health of the global economy and local concerns on rising borrowing costs rattled investors. Financials dropped the most as slowing economic growth was seen dampening demand for loans.
"The desire for exposure to India is muted for the moment. Caution is the word. It is hard to form a concrete view," said Shankar Char, vice-president and head of sales trading at ICICI Securities. The 30-share BSE main index shed 1.12 percent or 204.44 points to 18,109.89, its lowest close since June 23. Twenty-three of its components lost ground.
The benchmark is down more than 11 percent year-to-date and has underperformed its emerging market peers and world equities in 2011. Foreign funds' interest wavered in the second half of July, paring net inflows over the past five weeks to $2.8 billion.
Leading lenders State Bank of India ICICI Bank and HDFC Bank dropped between 1.1 percent and 2.9 percent. Export-focused software firms fell following sluggish manufacturing data from the United States, their largest market. Sector leader Tata Consultancy Services shed 0.4 percent while smaller rivals Infosys and Wipro fell 2.3 percent and 2.2 percent respectively. The 50-share NSE index shed 1.1 percent to 5,456.55. In the broader market, there were more than three losers for every share that gained. Around 503 million shares were dealt on the NSE, lower than the 90-day daily average volume of 588 million shares.
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