Indian shares slumped 1.84 percent on Monday to their lowest close in a week on continued foreign fund outflows dictated by global growth worries, in the absence of positive local triggers, with Reliance Industries and lenders leading the losses. The broad-based selling dragged index heavyweight Reliance Industries down as much as 2.49 percent, while lenders ICICI Bank, HDFC Bank and State Bank of India dropped between 1.8 percent and 4.1 percent.
Just a handful of shares including Coal India and Mahindra and Mahindra were spared. The world's top coal miner notched up gains of 1.13 percent, while the automaker added 0.85 percent. The 30-share BSE index fell 302.31 points to 16,151.45, with 22 of its components closing in the red.
The 50-share NSE index ended 1.9 percent lower at 4,849.50 points. There were about three losers for every gainer in the broader market, with over 458 million shares changing hands. "It's the global fear that is driving the markets," said Arun Kejriwal, a strategist at research firm KRIS. Indian shares had shed 12.8 percent in the three months to September, its biggest quarterly fall since the months following the Lehman Brothers collapse in 2008 as global growth worries stoked risk aversion.
Lenders were among the big losers on concerns India's central bank may not yet be done with its rate hike cycle. The banking index closed down 2.82 percent, with top state-run lender SBI shedding 2.59 percent to 1861.60 rupees. India has raised interest rates a dozen times since March 2010 to tame near double-digit inflation and has signalled more such moves were likely.
India's inflation in August accelerated to 9.78 percent, its highest in more than a year, from 9.22 percent recorded for July. Metal counters extended losses following the Indian Cabinet's approval last Friday of a mining bill calling for the firms to share either profits or amounts equivalent to royalties with local communities, a move that could dent the firms' profits. Shares in Tata Steel and Jindal Steel & Power fell 5 percent and 6.24 percent respectively.
Shares in JSW Steel fell to a more than two-year low on media reports of raids by the federal investigation agency at its plant. JSW denied the raid, saying the investigators had sought certain information about iron ore procurement. The stock tumbled 7.26 percent to 549.05 rupees. Utility vehicle maker Mahindra and Mahindra eked out 0.7 percent gains on hopes good monsoon rains and typical demand surge during the current festive season would push up sales.