Indian shares snap two-day rise

Indian shares snapped a two-day rise on Thursday and fell 0.6 percent as sluggish US economic data dented investor appetite for risk assets across world markets. Banks and automobiles were among the top losers as domestic concerns resurfaced about high inflation and rising interest rates putting a squeeze on corporate earnings.
Analysts said expectations for good rainfall in the June-September monsoon season, which is vital for boosting farm output and rural incomes in India, helped limit the stocks fall. Consumer goods leader Hindustan Unilever, which depends on large rural markets for sales, bucked the trend and rose 3.3 percent on a media report its UK-based parent was said to be on the block. The benchmark 30-share BSE index closed down 0.62 percent, or 114.63 points at 18,494.18, with 21 components losing ground.
It clawed back from early losses of 1.2 percent after the weather office said monsoon rains were 12 percent above normal in the week to June 1. The 50-share NSE index closed down 0.7 percent at 5,550.35 points. In the broader market on the NSE, 964 losers led 437 gainers on volume of 547 million shares. Leading car maker Maruti Suzuki, top truck and bus maker Tata Motors and utility vehicles maker Mahindra & Mahindra lost 2-3 percent on concern rising borrowing costs could crimp demand. ICICI Bank, the country's second-largest lender, shed 3.3 percent and HDFC Bank lost 1.6 percent, while the sector index dropped 1.8 percent.