Indian shares dive to five-week low

Indian shares dropped for a third straight session on Tuesday, falling 1.77 percent to their lowest close in more than five weeks, as a rating downgrade of top lender State Bank of India (SBI) rattled investors and sent bank stocks reeling on renewed fears of weakening asset quality.
Ratings agency Moody's Investors Service downgraded the standalone rating for SBI to D+ from C-, citing its "modest" capital and deteriorating asset quality, sending its shares to a two-year low. It closed down 4 percent at 1787.20 rupees ($36.3), after falling as much as 6 percent.
"The market sank after SBI got downgraded. One downgrade of SBI can drag this market 250 points, even 400 points at one time, that shows the market is vulnerable, the market is weak," said Arun Kejriwal, strategist at research firm KRIS. The sector index fell 3.1 percent, with top private lender ICICI Bank shedding 4.6 percent and smaller rival HDFC Bank dropping 1.6 percent.
The main 30-share BSE index closed down 286.59 points at 15,864.86, with all but 7 of its components in the red. The index touched 15,745.43 points during the day, its lowest level since February 8. The 50-share NSE index closed down 1.6 percent at 4,772.15 points. State-run Oil & Natural Gas Corp fell 1.5 percent to 264.05 rupees. Earlier, its newly appointed chairman Sudhir Vasudeva said the government must take a call on when it wants to go ahead with a share sale in ONGC, a divestment programme expected to raise as much as $2.5 billion.
Energy major Reliance Industries, which has the biggest weighting on the BSE index, dropped 2.11 percent to 771.60 rupees. Shares in Reliance, India's largest listed firm, has lost more than 27 percent of their value so far this year on concerns of slowing gas output at one of its key fields.
Maruti Suzuki, India's top car maker, outperformed the broader market, rising 2.8 percent, as the central bank removed the company from the caution list for foreign institutional investments. In the broader market, there were 2.2 losers for every gainer, with around 580 million shares changing hands.