Indian shares shed 0.5 percent on Tuesday as an anaemic global economic recovery drove investors to dump stocks across world markets. Explorer Cairn India, the target of a $9.6 billion take-over offer by Vedanta Resources, bucked the trend and climbed as much as 5.9 percent on expectations for a counter-bid by Indian state firms and a new oil discovery.
Outsourcers that get most of their revenue from exports fell on concerns a slower-than-expected world economic recovery will squeeze new orders. Metal makers also slid as copper prices declined in London as well as Shanghai. "Weak global markets are weighing on Indian stocks. Investors should be cautious," said Ambareesh Baliga, vice-president of Karvy Stock Broking. The 30-share BSE index closed down 0.53 percent, or 97.76 points at 18,311.59 points, with 23 of its components losing ground.
The benchmark index is still up 4.8 percent so far this year, outperforming the broader MSCI's emerging markets index and world stocks index that have dropped 1.3 percent and 6.3 percent respectively in the year to date. The 50-share NSE index slipped 0.7 percent to 5,505.10 points.
Baliga said if the broader index fell below 5,350 support, it could trigger a sharp downward correction. Cairn India closed up 3.2 percent at 354.20 rupees, after hitting 363.50, on volume of 3.5 million shares - more than 6 times the daily average in the past three months.