Indian shares eased for a second day on Thursday as risk appetite waned on slowing growth concerns and accelerating food inflation meant more upward pressure on interest rates. Data showed car sales in India rose 7 percent in May, their slowest pace of growth in two years, and analysts expect a further decline in momentum as higher fuel prices, interest rates and vehicle costs crimp demand.
The food price index rose an annual 9.01 percent in week to May 28, government data showed on Thursday, up from 8.06 percent in the previous week. Financials led the losses as the data comes ahead of the central bank's policy review on June 16, when it is expected to raise rates for the 10th time in 15 months. The 30-share BSE index slipped 0.05 percent or 9.39 points to 18,384.90, with 19 components closing in the red. "The market is in a state of limbo. It does not have any trigger right now," said Gajendra Nagpal, CEO of Unicon Financial.
The 50-share NSE index fell 0.1 percent to 5,521.05. Declining shares beat advancing ones in the ratio of 1.3 to 1 on a volume of 436 million shares on the NSE, lower than its 90-day average daily volume of 616 million shares. State-run refiners Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum fell by nearly 1 to 2.4 percent after sources said on Wednesday the government had again deferred a decision on raising prices of diesel, kerosene and cooking gas.
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