Indian shares crash on heavy sales by foreign funds

Mumbai — Indian shares fell more than three percent Monday, dragged down by banking scrips and the ongoing tussle between Tata Steel and a Brazilian company to acquire Anglo-Dutch steel-maker Corus.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) fell by 3.90 percent, or more than 500 points, intra-day to 13,261.73 points, its lowest level since Nov 20, as foreign funds sold heavily in blue chip companies.

Similarly the 50-share National Stock Exchange index Nifty was down nearly 3.5 percent at 3,823.10 points.

The major losers, which dragged the Sensex down were State Bank of India, Tata Steel, ICICI Bank, HDFC Bank, Infosys Technologies, Bajaj Auto, Maruti Udyog, Tata Motors, Dr Reddy’s Lab, ACC and Grasim Industries.

“Reserve Bank of India’s decision to hike the cash reserve ratio to tighten liquidity and contain inflation triggered a fresh round of selling, especially in banking stocks,” said an analyst with a leading brokerage here.

Index heavyweight Tata Steel faced increased pressure after the company raised its bid for the acquisition of Corus and its shares dropped Rs.20.90 to trade at Rs.461.50 – down 4.33 percent.

Top gainer on the Sensex was Infosys Technologies trading at Rs.2,206.90, up 0.44 percent. The company said Monday it would be one of the stocks represented on Nasdaq’s 100-share index – the first Indian company in the list.

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