Indian shares fell more than 1 percent on Thursday, on track to close at their lowest level nearly 6-1/2 months on continued selling by foreign investors on worries over retrospective taxes and a delay in land acquisition bill. The share market has lost nearly 12 percent since hitting a record high in March. The declines came amid sales of $2 billion of shares by investors in the last 14 sessions, excluding the amount raised from Daiichi Sankyo's stake sale in Sun Pharmaceuticals, according to depository data.
The benchmark BSE index lost as much as 1.1 percent, heading towards its lowest close since October 20, 2014, while the NSE index fell as much as 1.2 percent, on track to close at its lowest level since October 27, 2014. Foreign institutional investors sold shares worth a net 16.99 billion rupees ($265.80 million) on Wednesday, adding to their $360.88 million selloff in the previous session, exchange and regulatory data showed. Overseas investors have been net sellers this month with a net outflow of $693.8 million, the data showed.
"There is clarity on tax-related issues. Direction is missing in the government's policy decisions. We expect weakness to persist in the near-term," said Suresh Parmar, head, institutional equities at KJMC Capital Markets. Bluechips heavily owned by overseas investors fell the most. ICICI Bank was down 2.5 percent, while Reliance Industries was lower 1.5 percent. Oil and Natural Gas Corp fell 2.9 percent and Dr Reddy's Laboratories dropped 2.7 percent. Bharat Forge fell 5.1 percent on concerns about the company's sales in North America. SKS Microfinance was trading 2.2 percent lower after Morgan Stanley sold shares in the company through a block deal.