The Bombay Stock Exchange sensitive index dropped for a fourth day in thin trade, led by Infosys Technologies and ICICI Bank, with investors reluctant to hold bets ahead of New Year holidays in overseas markets.
Markets were closed today in Western Europe, Australia, Hong Kong, New Zealand and the Philippines, while December 25 and today were Japan’s two slowest full days of trading in the past five years. The US was closed yesterday for Christmas.
The sensex fell 239.80, or 2.5 per cent, to end at 9328.92. The index dropped 7.6 per cent in this holiday-shortened week, the most in two months. S&P CNX Nifty Index on the National Stock Exchange lost 2 per cent to 2,857.25. The BSE 200 Index fell 2.1 per cent to 1,115.86.
“The market has been exhibiting weakness and the trend will continue till the year-end,” Sanjay Dongre, who oversees about $1 billion in equities at UTI Asset Management in Mumbai.
A drop in the inflation rate to a nine-month low didn’t allay investors’ concerns about the slowdown in the economy.
Growth in India, Asia’s third-largest economy, may slow to 7 per cent in the year ending March 31 from 9 per cent or more in the previous three years, according to the government, which on Decmber 7 announced a Rs 20,000-crore ($4 billion) stimulus package.
“The slowdown in the economy is very worrying,” Sanjay Makhija, head of institution sales at Fortune Financial Services said in Mumbai.
Overseas funds sold a net Rs 220 crore ($25 million) of Indian stocks on December 24, increasing the outflow from stocks this year to $13.1 billion, the nation’s market regulator said.
Infosys Technologies, India’s second-biggest software services provider, declined the most in more than a month. It declined 5.4 per cent to 1,110.
ICICI Bank, the second-biggest bank, fell Rs 23.6, or 5.35 per cent, to 417.35, the lowest value since December 12.
Reliance Petroleum climbed Rs 5.35, or 6.7 per cent, to 84.75, the most since December 18. The unit of the nation’s biggest non-state company announced the start of a new refinery. The Mumbai-based refiner started processing crude at the refinery yesterday, the parent said in an e-mailed release.
