Indian shares fell 5.87 percent on Wednesday, on fresh concerns of a liquidity crunch and uncertainty about the state of the global economy, dealers said. The benchmark 30-share Sensex index fell 674.28 points to 10,809.12, snapping a two-day bounceback.
"There is apprehension on whether there is more bad news around the corner. Investors await more action from the central bank to help improve liquidity," said a dealer with brokerage Jamnadas Morarjee. India's finance minister P.Chidambaram on Wednesday said the central bank, the Reserve Bank of India, is likely to announce more liquidity measures in coming days. The Reserve Bank of India last Friday announced an injection of 600 billion rupees (12.3 billion dollars) into the financial system, in two instalments, by cutting the cash reserve commercial banks must hold to 7.5 percent.