MUMBAI: Indian shares fell 2.87 percent on Friday as investors locked in gains ahead of the release of an economic stimulus package expected from India’s government and central bank this weekend, dealers said.
The benchmark 30-share Sensex fell 264.55 points to 8,965.2. “The possibility of weak global trends ahead forced investors to unwind positions ahead of the weekend,” said a dealer with brokerage ULJK Securities. India’s inflation rate hit a seven-month low of 8.4 percent, according to official data released Thursday, giving the central bank more room to cut interest rates to stimulate flagging economic growth, analysts said. The central bank has called a news conference for Saturday at which it is expected to announce a cut in interest rates. An economic stimulus package is also expected from the government.
Since October, the central bank has reduced its benchmark repo rate at which it lends to commercial banks from 9.0 percent to 7.5 percent. Volume remained thin, five trading days after the devastating attacks across the city last week. Losers led gainers 1,104 to 985 on volume of 37.45 billion rupees ($754 million).
The rupee firmed against the dollar at 49.64 from 49.79 and fell against the euro to 63.16 from 63.08. The rupee remains near record lows following a massive pullout by foreign investors seeking safer havens.
Overseas funds have been net sellers of Indian stocks for the year, having sold 13.51 billion dollars so far in 2008, official data shows.
Software stocks fell on worries about the fallout from a recession in the US, with India’s second-largest software exporter Infosys Technologies down 59.5 rupees or 4.94 percent at 1,135.7.
India’s largest software exporter TCS fell 28.05 rupees or 5.1 percent to 521.7. afp
