India's NSE ends at lowest level in over a month

Tue Jul 30, 2013 8:07am EDT

* BSE ends down 1.25 pct, NSE falls 1.31 pct
    * Oil Marketing cos fall on concerns over dollar bill as
rupee slumps

    By Himank Sharma
    MUMBAI, July 30 (Reuters) - India's NSE index fell for a
fifth successive session on Tuesday and wiped out all gains made
so far this month, after the rupee's fall to below the key
psychological level of 60 to the dollar hit oil importers such
as Hindustan Petroleum.
    The rupee fell after the Reserve Bank of India left interest
rates unchanged on Tuesday and did not announce any more
specific measures to defend the currency after announcing this
month steps to drain cash from the financial system.
 
    Lenders such as Yes Bank erased earlier gains in the day to
end with losses. Although at first investors reacted with relief
the RBI kept interest rates on hold, the rupee's falls have
dashed hopes that the central bank will roll back its cash
tightening measures any time soon.
    Indian policy makers are in a tight spot, needing additional
steps to defend the currency, but without resorting to measures
that would be seen as too aggressive. 
    Foreign investors have pulled out a net 63.36 billion rupees
($1.07 billion) from stocks so far this month, making July the
second successive month of outflows by foreign investors,
regulatory and stock exchange data shows.
    "Although RBI is concerned about the economic growth,
falling industrial production and poor global economic
conditions, currency stabilisation is first on its agenda," said
Aneesh Srivastava, chief investment officer at IDBI Federal Life
Insurance Co Ltd.
    The broader NSE index fell 1.31 percent to 5755.05,
its lowest close since June 27.
    The main BSE index closed down 1.25 percent at
19,348.34, its lowest since July 10.
    Investors are now awaiting the U.S. Federal reserve's
statement for hints on when the central bank may begin to scale
back its massive bond-buying.
    Oil marketing companies Hindustan Petroleum Corp Ltd
 fell 11.05 percent, while Bharat Petroleum Corp Ltd
 fell 8.55 after the rupee slumped to a
three-week low. 
    Indian Oil Corp Ltd lost 8.24 percent.
    Lenders erased earlier gains, with Yes Bank Ltd 
falling 4.06 percent and Axis Bank Ltd closing down
0.48 percent. 
    The NSE banking sub-index is down 12.12 percent
so far this month compared with a 1.49 percent fall in the
broader NSE as the RBI measures have raised short-term funding
costs, while the surge in bond yields are leading to concerns
about the value of their debt holdings.
    Havells India Ltd slumped 12.67 percent after
April-June sales fell short of expectations on lower industrial
demand. 
    GAIL (India) Ltd, fell 3.68 percent after Barclays
downgraded the stock to "underweight" and lowered its earnings
forecast on weak gas output and higher prices. 
    Jaiprakash Associates declined 5.03 percent to its
lowest level in more than four years. 
    Morgan Stanley and Citigroup downgraded the debt-laden
cement maker on Tuesday on concerns about mounting interest
costs, a day after it reported April-June results.
 
     Shares in Dr. Reddy's Laboratories closed down
1.82 percent after its April-June quarter revenue lagged market
estimates. 
    
   FACTORS TO WATCH                                             
* Dollar falls on caution before Fed meeting next week    
* Oil slips towards $107 on demand worries                 
* Report on easy Fed line leaves dlr at 5-week low   
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
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 (Editing by Anand Basu)