Indian shares drop

Indian shares dropped 1.9 percent on Thursday to post their lowest close in six weeks, as investors cut their exposure to risky assets amid concerns about the impact of high interest rates and slowing economic growth on corporate earnings. The benchmark index has lost 6.3 percent over the last six sessions, in their longest losing streak in more than three months.
The market sentiment was also dented by the eurozone debt crisis and its impact on the global economy and the financial system. Shares in energy major Reliance Industries led the losses and ended 4.5 percent lower at 809.95 rupees, as institutional investors pared their holdings in the index heavyweight. The stock is down nearly a quarter this year.
The main 30-share BSE index ended down 1.87 percent, or 314.16 points, at 16,461.71, with all but three of its components closing in the red. The index had turned positive briefly during the day. The 50-share NSE index ended down 1.9 percent at 4,934.75 points. In the broader market, losers were slightly ahead of gainers in the ratio of 2.7:1 on heavy volume of 640 million shares.
"There is a clear recognition of the fact that corporate earnings will remain under pressure until we see some fiscal as well as structural changes," said Anshu Kapoor, private wealth head at Edelweiss Global Wealth Management. The benchmark is down nearly 20 percent in 2011. Foreign portfolio investors have bought equities worth about $663 million so far this year, sharply down from $29 billion they invested in 2010.
India's central bank has been among the most aggressive globally, increasing rates 13 times since early 2010, and denting consumer spending and investment by companies while inflation remains near double digits. Weak global demand is exacerbating the slowdown in the Indian economy whose growth this year might be well below the 8.5 percent heady pace in the fiscal year that ended in March.
Macquarie earlier this week downgraded its India's growth forecast for the year to March 2013 by 1 percentage point to 6.9 percent due to a lack of policy reforms and the lagged impact of monetary tightening. Infosys fell nearly 1 percent to 2,753.50 rupees and Wipro dropped 1.7 percent to 367.65 rupees. The technology sector index ended 0.8 percent lower. Software services company Patni Computer Systems rose 10.1 percent to 428.25 rupees, the highest closing level in more than six months, after US-listed parent iGate said it planned to delist Patni.