Indian shares fell 0.7 percent on Monday, with Bharti Airtel sliding to its lowest close in more than two months as investors gave a thumbs down to its $10.7 billion bid to buy Kuwaiti Zain's African assets. "Bharti dampened the sentiment today," said Vaibhav Sanghavi, director of Ambit Capital. Investors were concerned Bharti may have offered a high price that could strain its earnings over the near term.
Shares in Bharti tumbled 9.2 percent, their biggest fall in 4-1/2 months, to 285.40 rupees. It was the lowest close since November 27, 2009 and the company's market value fell $2.4 billion to $23.4 billion. With 5 million shares traded, they topped the volume among the main index stocks.
Financial stocks declined on higher-than-expected inflation of an annual 8.56 percent in January. It was the fastest pace in more than a year, putting more pressure on the central bank to raise borrowing rates. Top lender State Bank of India fell 1.25 percent and rival ICICI Bank shed 1.2 percent. The 30-share BSE index closed down 0.71 percent, or 114.24 points, at 16,038.35.
Two-thirds of its components closed in the red. Sanghavi said selling by foreign funds across regions was a concern. "Risk is being taken off the table and India is no exception," he said. Foreigners have pulled out $2.1 billion over the last 15 sessions from the Indian equities. The withdrawal has pushed the BSE index down more than 8 percent this year.
In 2009, the benchmark had jumped 81 percent on the back foreign inflows of $17.5 billion. Gajendra Nagpal, CEO of Unicon Financial, said the market could rise in the run up to the national budget on February 26. In the broader market, losers outpaced gainers in a ratio of 1.4:1 on volume of 316 million shares, lower than last week's daily average of 351 million shares. The 50-share NSE index closed 0.5 percent lower at 4,801.95.