India's two main benchmarks fell yesterday, closing at their lowest since January, as the rupee hit a new record low below the psychologically key 56 level, while global stocks continued to be routed because of fears about the Eurozone.
Telecom stocks such as Bharti Airtel were among the big decliners ahead of today's meeting by the tele-com ministry to decide on a controversial proposal from a regulatory body to raise spectrum prices in an auction of mobile airwaves.
Traders expect more weakness ahead for Indian stocks, given the rupee has dropped more than 13 per cent since its 2012 peak in February, underscoring an urgent need of major reforms. "There is lot of uncertainty in the market partly because of European crises and partly because of inaction from of government and Reserve Bank of India," said R.K Gupta, managing director at Taurus Mutual Fund
India's main 30-share BSE index ended down 0.5 per cent at 15,948.10, closing at its lowest since January 9 and adding to the 1 per cent loss it had clocked in previous session.
The broader 50-share NSE index, also known as Nifty, fell 0.51 per cent to 4,835.65, its lowest since Jan. 12.
Gupta added market valuations are turning attractive and said he expected a recovery should the government address some of the investor concerns about its fiscal challenges, including about its spending.
Foreign flows to equities were slightly positive in May as of Tuesday's close, but overseas investors were net sellers of around Rs11 billion (Dh733 million) worth in April.