India's main stock index closed provisionally 2.82 percent lower on Monday, dragged down by Reliance Industries and top private lender ICICI Bank. The main 30-share BSE index shed 505.36 points to provisionally close at 17,418.21, with 28 of its components declining.
The 50-share NSE index provisionally fell 2.7 percent to 5,281.20. The markets fell as high global oil prices revived concerns about inflation in the country that imports about 80 percent of its oil consumption. Lenders such as ICICI Bank and bigger rival State Bank of India led the losers on worry price pressures could make it difficult for the central bank to ease monetary policy.
Automakers and steel producers also fell as investors took profits after the main stock index posted its first weekly decline in 2012 last week. "High oil prices, forthcoming federal budget and results of elections for five states are weighing on investors' mind," said Jigar Shah, senior vice president at KIM ENG Securities. The government will present its budget on March 16 for the fiscal year that begins on April 1, amid slowing economic growth and mounting concerns about public finances.
The election results due on March 6 in five states of Manipur, Uttarakhand, Goa, Punjab and Uttar Pradesh would give an indication about the outlook for the Congress party, which heads the federal coalition, before nation-wide elections in 2014. ICICI Bank fell 2.4 percent and State Bank of India shed 2.1 percent. Tata Steel and Steel Authority of India fell by more than 3 percent.
Top carmaker Maruti Suzuki dropped 1.1 percent, while utility vehicle and tractor maker Mahindra & Mahindra lost 2.2 percent and Tata Motors fell almost 1 percent. Sterlite Industries was down 0.7 percent after opening up 6.2 percent after its parent Vedanta said on the weekend it would merge the company with sister concern and iron ore miner Sesa Goa to create Sesa Sterlite. Sesa Goa was down 9 percent at 206.50 rupees. Kingfisher Airlines rose as much as 3.3 percent after UK-based the Times newspaper cited the company's chairman as saying the struggling airline is talking with two foreign carriers about a potential rescue package that could be announced within days.
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