Indian shares extended losses to the second day and closed 1.7 percent lower on Friday as concerns over a slowdown in the economy intensified after the finance ministry cut the country's growth forecast for the current fiscal year. The economy is likely to grow by between 7.25 percent and 7.75 percent in the fiscal year ending March, sharply lower than the original estimate of 9 percent, a mid-year review of the economy tabled by the finance minister in parliament showed.
The 30-share BSE index fell 274.78 points to 16,213.46, with 27 of its components in the red. The benchmark fell as much as 2 percent during the day. The index lost 3.76 percent for the week. Shares of index heavyweight Reliance Industries led the losses and fell nearly 3 percent to end at 755.70 rupees, their lowest close since November 25. Nomura downgraded the stock to "neutral" from "buy," citing diminishing exploration and production possibilities, and declining refining margins. "The market has over-reacted to the mid-term review. The lower GDP projections were already known and there is nothing new that you can derive from the review," Kishor Ostwal, chairman and managing director, CNI Research, said.
The Reserve Bank of India is widely expected to pause its rate tightening cycle next Friday at its monetary policy review as a slowing economy and a fragile global economic environment take centre stage. Private lender ICICI Bank and HDFC Bank fell 1.77 and 2.2 percent, respectively.
Larsen & Toubro, the country's biggest engineering conglomerate, shed 2.65 percent to close at 1,226.85 rupees, after falling as much as 3.33 percent intraday. Shares of Tata Motors, India's third-largest car maker by domestic sales, closed down 2.94 percent at 183.00 rupees. Fellow automaker Mahindra & Mahindra ended down 3.65 percent at 703.25 rupees. The 50-share NSE index fell 1.56 percent to 4,866.70. In the broader market, there were 2.3 losers for each gainer on a moderate volume of 563.6 million shares.
Comments
Comments are closed for this article.