Indian shares fall

Indian shares fell on Wednesday as a global flare-up of risk aversion hit blue chips such as Reliance Industries, though broader losses were cut as lenders gained on speculation the central bank could cut the cash reserve ratio. Fears about the potential impact in southern India from a powerful 8.6 magnitude earthquake off Indonesia also kept investors on edge, exacerbating falls in Reliance and hitting others such as Tata Power that could have been the most impacted.
Markets are facing a series of important tests in the days ahead, with industrial output on Thursday, inflation on Monday and the Reserve Bank of India's policy meeting on April 17. Though most analysts polled by Reuters still expect the RBI to announce a cut in the repo rate on April 17, they are paring back expectations for rate cuts through the new fiscal year started in April.
Some analysts also do not discount a cut in the cash reserve ratio, or the amount of funds banks must keep at the central bank, since such a move would most directly help ease the tight cash crunch facing lenders. "We now expect rate cuts of 75 basis points in 2012 versus 125 basis points earlier, due to high crude oil prices and currency depreciation," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance, who oversees 12.5 billion rupees in Indian equities.
The country's main 30-share BSE index fell 0.26 percent at 17,199.40 points and the 50-share NSE index fell 0.32 percent at 5,226.85. Reliance Industries fell 1.7 percent, tracking falls in Asian stock markets on Wednesday as global markets were hit by concerns that worsening debt problems in a number of eurozone economies may threaten global growth.
Shares in India's biggest energy conglomerate have been hit recently by concerns about its earnings as Indian companies get ready to post earnings this month. Reliance was also hit, along with shares of power generation companies, due to fears about a disruption in raw material supplies after the earthquake off the coast of Indonesia. Reliance said its output was normal and added it was monitoring the situation closely. Authorities in India's Andaman and Nicobar islands, to the north of where the quakes struck, said waves of up to 3.9 metres (13 feet) could hit there. Tata Power fell 2 percent while Adani Power lost 2.3 percent.