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New Delhi: Indian shares fell 0.7 per cent on Tuesday, a fifth straight loss that took them to their lowest close in August, led by a decline in telecoms and housing lender HDFC and renewed global credit jitters.
Shares in Bharti Airtel and Reliance Communications fell after analysts said the regulator's proposals to allow internet calls on phone lines could put further pressure on already low tariffs and may hurt the telecoms' revenue growth.
Fresh concern about the future of the two largest US home finance groups rattled equity markets around the world, sending Asian stocks to a two-year low, while European markets were down more than one per cent.
But a fall in oil prices below $112 a barrel helped boost sentiment. Oil prices have corrected nearly 24 per cent since their peak of more than $147 a barrel in mid-July and analysts expect it could fall further towards $100.
"Crude is coming down, commodity prices are softening, we are beneficiary on the import front. But people are not ready to put a big chunk of money before markets actually stabilise," said K.K. Mital, head of portfolio management services at Globe Capital. "Domestic inflation concerns are there, but I think the market has kind of discounted 13 per cent inflation levels. The bigger worry is slowing manufacturing growth."
The 30-share BSE index ended down 101.93 points at 14,543.73, it lowest close since July 31, with 23 components falling. It has fallen 6.2 per cent over the past five sessions.
The index is down more than 28 per cent on the year, and foreign funds have been net sellers of $6.8 billion of stocks.
Top phone firm Bharti Airtel fell 2.1 per cent to Rs791.60 and No. 2 Reliance Communications lost 3.1 per cent to Rs399.80. Fifth-largest Idea Cellular lost nearly five per cent.
Leading mortgage lender HDFC fell 3.2 per cent to Rs2,283.25, but banks were mixed.
Sector leader State Bank of India fell one per cent to Rs1,443.80, while second-ranked ICICI Bank bounced off lows to close two per cent up and HDFC Bank rose 0.6 per cent.
In the broader market, 1,510 losers were ahead of 1,112 gainers and volume was relatively low at 231.8 million shares as bond and foreign exchange markets were shut.
The 50-share NSE index lost 0.56 per cent to 4,368.25, its lowest close since July 31.
Elsewhere in the region, Karachi's 100-share index gained 1.86 per cent to a 10,919.06 points on easing political tensions.
Colombo's All-share index rose 0.4 per cent to 2,438.61.
Tractor maker Escorts rose 2.4 per cent to Rs83.95 after the company said it expects to post a 10-12 per cent rise in tractor sales for the year ending September 2008.
Internet services provider Net 4 India rose 3.8 per cent to Rs71 after the telecoms regulator recommended allowing internet calls to land on telephones.
Currency: Rupee weakens
India's rupee declined for a sixth day, its worst run in almost nine months, on speculation stock losses will spur investors to reduce local assets.
The rupee fell to the lowest in more than 16 months as the benchmark stock index fell for a fifth day, extending this year's loss to 28 per cent.
The rupee closed at 43.615 a dollar at 5pm, the lowest since March 29, 2007, versus 43.5985 on Tuesday.
- Bloomberg
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