The year-end slide continued for the third straight day in the stock market on Thursday as the barometer Sensex slumped by 183.92 points amid heavy sell-off in market leader Reliance Industries and some blue-chip banking stocks.
Subdued global markets and Europe?s economic woes also pushed investors to cut their exposure on concern the global risk-aversion sentiment could trigger more foreign fund withdrawals from emerging markets, traders said.
The main 30-share BSE index shed 1.17% to 15,543.93, its lowest close since December 20. Twenty four of its components declined.
The benchmark has lost 2.7% over the past three sessions and is on track to post its biggest annual fall in three years, having dropped 24% since the start of January.
Energy major Reliance Industries, which has been under pressure due to falling gas output from its field off the country?s east coast, led the losses. The stock dropped to its lowest close in more than two years.
Investors also dumped banks amid mounting concerns about bad loans as delays in projects and sharp increases in interest rates dented the ability of borrowers to repay loans.
?The worry for the banking sector is on the provisioning side and not on the credit side,? said Deven Choksey, chief executive officer at KR Choksey.
….because many infrastructure projects are either going slow or have been stalled for some reason, there will be an impact on the quarterly earnings for banks.
Top private-sector lender ICICI Bank and smaller rival HDFC Bank slipped 1.6% and 2.3% respectively. The BSE?s banking sector index has plunged near 30% year to date.
The rupee fell as much as 0.8% on concerns worsening European economy could accelerate foreign fund withdrawals from India.
