MUMBAI - India’s main stock index fell more than 3 percent on Monday, tracking losses elsewhere in Asia as lingering credit worries in the United States roiled global equity markets.
Traders said there were worries foreign portfolio inflows, which had driven the BSE index to a series of record highs in the last two months, could slow down because of souring appetite for risky equity.
Reliance Industries and ICICI Bank, each fell more than 4 percent, leading the drop. The two stocks account for more than a quarter of the weightage in the main index.
At 11:01 a.m., the benchmark 30-share BSE index pared some of the losses and was down 2.33 percent or 439.69 points at 18,467.91, with 25 of the components falling. It had dropped as much as 3.03 percent in early deals.
The index had fallen 5.4 percent last week and is nearly 9 percent off a lifetime high of 20,238.16 hit on Oct. 30.
"The market outlook is shaky in the short to medium term," said D.D. Sharma, vice-president at Anand Rathi Securities.
"I don’t think foreign investors are going to inject fresh funds at this fag end of the year. We will see fresh money only in January. So we are advising to book profit."
Foreign inflows have slowed this month after the market regulator curbed the use of participatory notes used by unregistered foreigners to buy Indian shares, while the lingering credit worries in the United States have also weighed.
Data showed foreign portfolio investors have been sellers of around $300 million in the first six sessions in November, trimming their net purchase in 2007 to about $17 billion.
Asian stocks fell sharply with Tokyo’s Nikkei hitting its lowest level in about 15 months, after U.S. stocks dropped for a third day on Friday on disappointing outlook from technology companies.
Sharma said the selloff across Asia was accelerating the fall in India. Three of the index components were down more than 4 percent, while three dropped more than 3 percent.
Reliance Industries was trading 3.2 percent down at 2,647.20 rupees, recovering from an intra-day low of 2,606 rupees.
ICICI Bank was down 3.8 percent at 1,100 rupees.
Shares in second-biggest mobile operator Reliance Communications and power-equipment maker Bharat Heavy
Electricals were down more than 4 percent.
In the broader market, 1,671 losers outpaced 538 gainers on volume of 105 million shares.
The 50-share NSE index was down 2.56 percent at 5,518.05.
Elsewhere in the region Karachi’s 100-share index was up 1.02 percent at 13,560.76, while Colombo was up 0.58 percent at 2,634.55.
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Tobacco and consumer goods maker ITC Ltd rose 1.9 percent to 172.10 rupees. Macquarie Securities said on Monday it had raised its 12-month target price on the stock by 12 percent to 225 rupees.
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Steel maker Ispat Industries Ltd hit a life high of 38.65 rupees and was trading 4.6 percent up at 37.65 rupees after 4.44 million shares, or 0.36 percent of the equity, changed hands on the BSE in block deals at between 36.55-38.20 rupees each.
TOP THREE BY VOLUME
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Ispat Industries on nearly 20 million shares.
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Essar Oil on 10.3 million shares.
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Reliance Natural Resources on 8.6 million shares.
