mumbai 08 27, 2012, 17:40 IST
The BSE Sensex fell on Monday for a second consecutive session as lenders such as ICICI Bank faltered on worries economic growth data would show continued weakness at a time when parliament is at a standstill and the RBI is reluctant to cut rates.
India is due to report April-June growth numbers on Friday as analysts, including Citigroup and CLSA, have recently cut their growth estimates for the fiscal year ending in March to a decade low of around 5.5 percent.
Growth is weakening at a time when controversy over coal concessions has paralysed parliament, leading to increased calls for action via executive decisions, although the government also faces steep disagreements within its own ruling coalition.
The Reserve Bank of India has also pushed the government to cut spending and pass policy reforms, as the central bank is reluctant to cut interest rates given its concerns about inflation.
"We have lost our hope on any reform measures being implemented through the current monsoon session of Parliament due to political impasse," said G. Chokkalingam, Executive Director and Chief Investment Officer of Centrum Wealth Management,
"However, we are still living on the last leg of hope that the government will implement whatever it can do outside the scope of Parliament once the current monsoon session of Parliament is over."
The Sensex fell 0.59 percent to 17,678.81, marking its third losing session in four.
The 50-share Nifty declined 0.68 percent to 5,350.25.
Banks were the leading decliners. ICICI Bank fell 2 percent, while State Bank of India lost 2.6 percent. Caution prevailed ahead of the GDP data, especially given worries a weak number would not be enough to spur a rate cut.
Air carriers SpiceJet dropped 8.2 percent, while Kingfisher Airlines
Adani Ports and Special Economic Zone, Lanco Infratech
Larsen & Toubro fell 2 percent on media reports the president of its power business, Ravi Uppal, may join rival Cairn India, depriving the engineering company of a key executive.
IFCI dropped 5.8 percent to its lowest close since January 25, extending a slump that saw shares already slump 16.2 percent on Friday, after the government increased its stake in the project finance firm to 55.6 percent by converting some of its debt into equity.
However, among gainers, oil refiners rose on hopes for higher margins as Venezuelan gasoline exports are expected to be impacted as firefighters struggle to put out a blaze at the country's biggest refinery.
Reliance Industries gained 0.67 percent, while Cairn India added 0.8 percent.
Mahindra & Mahindra rose 1.5 percent after Bank of America-Merrill Lynch raised its target price, saying it expected a decline of around 5 percent decline in tractor sales in fiscal 2012/13 to be "more than compensated" by growing auto sales.
