Indian shares fell 0.72 percent on Monday to their lowest close since August 2009, as investors continued last week's selloff on mounting concerns over slowing growth in Asia's third-largest economy amid lingering global economic uncertainty.
Banking stocks were the top losers, with many lenders hitting more than two-year lows due to lower-than-expected advance tax payments and the potential impact of a possible sovereign rating downgrade of European countries that may compound the continent's protracted sovereign debt crisis.
India's main 30-share BSE index closed down 112.01 points at 15,379.34, with 21 of its components falling. One stock remained unchanged. The benchmark index had fallen 4.5 percent in the previous week to its lowest close in more than two years. The broader 50-share NSE index closed down 0.83 percent at 4,613.10 points. In the broader market, falling stocks outnumbered gainers by a ratio of around 4:1, with 605 million shares changing hands.
Research house CLSA said in a note on Sunday that the benchmark index could possibly slide to 11,000-12,000 points due to persistently high inflation, a weakened rupee, high interest rates and the crisis in Europe. CLSA also cut India to "neutral" from "overweight" in its Asia-Pacific ex-Japan relative return portfolio, its third weightage cut for the country this month.
Shares in India's biggest banks were hit the hardest, with the sector index closing down 3.1 pct to 7,920.75 points, closing below 8,000 points for the first time since September 2009. ICICI Bank, India's biggest private bank, fell 2.8 percent to 657.20 rupees ($12.47), having fallen to a low of 645 rupees earlier in the day, its lowest level since June 2009. Benchmark heavyweight State Bank of India, the country's largest lender, fell to its lowest price since July 2009, before recovering to close at 1,628.10 rupees, a fall of 3.0 percent.